Moody's Investors Service has downgraded to Baa3 from Baa1 the underlying general obligation rating of Pinckney Community Schools, Mich.
The district has $119.4 million of general obligation unlimited tax debt outstanding, of which $50.6 million is rated by Moody's. The outlook of the school district remains negative.
Outstanding general obligation bonds are secured by the district's unlimited tax pledge as authorized by voters.
The downgrade to Baa3 reflects significant structural imbalance of the district's general operations, which is expected to have resulted in a deficit general fund balance at the close of fiscal 2013.
Continuation of operational imbalance is expected in fiscal 2014 and is primarily driven by ongoing declines in enrollment. The current rating further incorporates the district's moderately sized and steadily depreciated tax base, above average resident income levels, and elevated direct debt burden.
Maintenance of the negative outlook reflects the expectation that absent additional cost reduction efforts and stabilization of the currently negative enrollment trend, the district's financial profile could continue to worsen and result in further downward movement of the credit rating.
