Moody's Investors Service said it has downgraded to Baa1 from A2 the underlying rating on Beaver Local School District, Ohio's general obligation unlimited tax debt.
Concurrently, Moody's has assigned a negative outlook.
The downgrade applies to $21 million of outstanding GO debt. The bonds are secured by a dedicated property tax levy unlimited as to rate or amount to pay debt service.
The Baa1 reflects the district's significantly weakened financial position characterized by narrow reserves and large, unforeseen budget variances; moderately sized tax base with limited prospects for economic development; above average debt burden; and high exposure to underfunded pension liabilities of two cost-sharing retirement plans.
The negative outlook reflects the risk that financial results will continue to underperform forecasts and that the district's reserve position will continue to deteriorate.
