Moody's Investors Service said it has downgraded to A1 from Aa3 the underlying rating on Goodrich Area Schools, Mich.'s general obligation bonds.
The debt is secured by an unlimited tax pledge of the district. The district has $25 million of rated general obligation unlimited tax debt outstanding. An additional $23.4 million of unrated general obligation debt is also outstanding. Concurrently, Moody's has assigned a negative outlook.
The downgrade to A1 reflects the district's weakened financial position following four consecutive operating deficits. The rating also incorporates the district's moderately sized tax base, above average resident wealth and income levels, elevated debt burden and an above average pension liability.
The negative outlook reflects Moody's belief that the district's weakened financial position will remain challenged over the near term given projected declines in enrollment.
