Salinas Elementary SD, Calif., Downgraded to A2 by Moody's

Moody's Investors Service said it downgrades to A2 from A1 the rating of Salinas Elementary School District, Calif.'s general obligation bonds outstanding in the approximate amount of $24.6 million.

The ad valorem bonds are secured by the district's unlimited property tax pledge.

The downgrade primarily reflects the district's extremely narrow liquidity due to state funding deferrals and the district's inability or unwillingness to balance financial operations.

While narrowing liquidity is expected to stabilize due to a reduction in apportionment deferrals from the state, reserve draws are expected to continue, limiting the district's financial flexibility. The rating also reflects the district's sizable tax base, below average wealth indices and manageable debt burden.

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