Moody's Investors Service said it has upgraded to Aa2 from Aa3 the underlying rating on Berkeley County School District, S.C.'s $151 million of outstanding general obligation debt and upgraded to Aa3 from A1 the rating on $296 million of installment purchase revenue bonds issued through Securing Assets for Education.
Moody's has assigned a Aa1 enhanced rating with a stable outlook and a Aa2 underlying rating with a stable outlook to the district's $45 million general obligation refunding bonds, Series 2012D.
The bonds are secured by the district's unlimited general obligation ad valorem tax pledge.
The upgrade to Aa2 reflects the district's sizable, albeit concentrated, tax base that continues to benefit from its proximity to Charleston and the historically sound reserves position that is bolstered by formal reserve policies and conservative budgeting practices.
The rating also considers the district's above average debt burden that is expected to increase considerably in the medium term. Bond proceeds will refund the district's Series 2005 bonds for an expected net present value savings of 10% of refunded principal, with no extension of maturity.
The Aa1 enhanced rating with a stable outlook is based on the additional security provided by the South Carolina School District Credit Enhancement Program (SCSDCEP).
The program assures timely debt service payment through county and state government coordination and is backed by sizable annual state appropriations under the state's Education Finance Act.
As the SCSDCEP is a state-backed enhancement program, the program's rating is closely related to the state's rating and consequently carries the stable outlook that is assigned to the state's Aaa general obligation rating.