NEW YORK - Moody's Investors Service said it has downgraded to Baa1 from A3 the rating on Brighton Area School District, Mich.'s general obligation unlimited tax debt. The outlook on the district remains negative. The Baa1 rating and negative outlook apply to $93.7 million of outstanding rated general obligation tax debt.
The outstanding bonds are secured by the district's general obligation unlimited tax pledge. The rating downgrade reflects the district's ongoing financial pressures which have led to a substantial deficit position in the district's general fund.
Also incorporated in the rating action is the district's sizable tax base; above average socioeconomic characteristics; and above average debt burden with rapid amortization.
The negative outlook reflects Moody's belief that the district will struggle to achieve a positive general fund position in the near term due to enrollment declines, state funding pressures and the likelihood that the district's deficit elimination plan with the state of Michigan (GO rated Aa2/stable outlook) will not provide a workable solution within the originally projected timeframe.