Moody's Investors Service said it has downgraded to Aa3 from Aa2 the rating on Willoughby-Eastlake City School District, Ohio's long term issuer rating, $8.6 million of general obligation limited tax debt outstanding, and $7.7 million long term tax anticipation notes outstanding.
Concurrently, Moody's downgraded to A1 from Aa3 the rating on the district's $14 million outstanding certificates of participation as well as assigned an A1 rating to the current issue. The certificates of participation, Series 2013, the current issue, are secured by certain base rental payments to be made by the district and will be used to finance various school facility upgrades and renovations. Post-sale, the district will have $8.6 million of outstanding general obligation limited tax debt, $7.7 million of tax anticipation notes outstanding, and $20.7 million of lease revenue debt outstanding.
The downgrade to the Aa3 long term issuer and GOLT ratings reflects the district's modest financial position that has weakened in recent years; elevated exposure to renewal risk related to the voter authorized operating levies; large tax base with recent valuation declines; sound socio economic profile; high Moody's adjusted net pension liability; and solid debt position with limited future debt expected.
The A1 rating reflects the COP's legal structure; annual appropriation risk; essential nature of the pledged asset; and the district's underlying credit fundamentals.
