Moody's Investors Service said it has downgraded to A1 from Aa2 the underlying general obligation rating of Spring Lake Public Schools, Mich.
The district's general obligation unlimited tax debt is secured by a property tax pledge, as authorized by voters, unlimited as to rate or amount to pay debt service on outstanding bonds. The district has a total of $72.1 million of general obligation unlimited tax debt, $15.4 million of which is rated by Moody's.
The A1 primarily reflects the district's elevated debt burden and narrowed reserve position following many consecutive operating deficits.
The A1 also reflects slow amortization based on planned additional borrowing through the School Loan Revolving Fund (SLRF), moderately sized tax base, above average socioeconomic traits, stable enrollment trend and long-term risk posed by exposure to an underfunded cost-sharing retirement plan.
