Livermore Valley JUSD, Calif., Downgraded to Aa3 by Moody's

Moody's Investors Service said it has downgraded Livermore Valley Joint Unified School District, Calif.'s approximately $82 million in outstanding general obligation debt to Aa3 from Aa2 and removed the negative outlook.

Moody's assigned a Aa3 rating to the district's $52.8 million 2014 general obligation refunding bonds.

The downgrade of the district's rating to Aa3 reflects the narrowing of district's general fund financial position to levels that are far below median levels for school districts in this rating category nationwide.

The downgrade also reflects the expectation that while reserve levels are projected to slowly recover, they will remain below state and national median reserve levels through fiscal year 2017. Additionally factored into the rating is the district's strong and diverse tax base with above average resident wealth levels and a manageable debt burden.

The GO rating also reflects the strength of the voter-approved, unlimited property tax pledge securing the bonds and the well-established levy and collection history for the debt service levy. This supports the credit quality of these bonds, somewhat offsetting the risk of future financial weakness.

The county rather than the district levies, collects, and disburses the district's property taxes, including the portion constitutionally restricted to debt service on general obligation bonds which also supports the credit quality of these bonds.

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