Moody's Investors Service has downgraded Brazosport College District's Series 2006 Revenue bonds to A2 from A1. The rating action affects $6.8 million of revenue bonds. The outlook is stable.
The A2 rating reflects Brazosport's market position as a small community college, serving approximately 2,600 full-time equivalent students primarily in Brazoria County. The A2 rating incorporates revenue from highly rated sources, including the 23% from the Aaa-rated State of Texas and 35% from Aa2-rated Brazoria County. The rating also reflects the college's limited financial reserves and weak operating performance.
The downgrade reflects the college's significant increase in leverage due to the issuance of tax-backed debt and use of reserves with limited prospects to replenish the balance sheet due to operating deficits. The rating action also incorporates past contraction of the tax base, which is highly concentrated in the petrochemical industry.
