Carrizozo Municipal SD, N.M., Downgraded to Baa2 by Moody's

Moody's Investors Service has downgraded Carrizozo Municipal School District, N.M.'s general obligation rating to Baa2 from Baa1.

Concurrently, Moody's has assigned a negative outlook.

The downgrade and negative outlook affects $200,000 in Moody's rated general obligation debt. The district has an additional $2.19 million of general obligation debt not rated by Moody's.

The debt is secured by an unlimited ad valorem tax levied on all taxable property within the district. The downgrade to Baa2 reflects the district's ongoing operational imbalance that has resulted in narrow reserves, limited tax base, and below average socioeconomic indices.

The rating also incorporates the district's manageable debt burden with rapid principal amortization. The negative outlook reflects the district's ongoing budgetary challenges, particularly due to declining enrollment, that are expected to continue to pressure operations and reserves. In addition, the outlook also incorporates the district's high pension burden, based on Moody's calculation of the district's share of liability for the state-run Educational Employees' Retirement Plan.

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