Moody's Investors Service said it has downgraded Carol Stream Park District, Ill.'s general obligation rating to A2 from A1.
Concurrently, Moody's assigns an A2 rating to the district's $14.7 million general obligation park bonds, Series 2013.
The Series 2013 bonds are secured by the district's general obligation unlimited tax pledge, which benefits from a property tax levy that is unlimited as to rate or amount. The Series 2013 bond proceeds will finance the construction of a new recreation center and various other capital projects.
The downgrade to A2 from A1 reflects the outsized enterprise risk associated with the district's new fitness center; narrow financial position that exposes the district to risk should revenues and/or expenditures not come in as projected; leveraged debt profile with elevated debt burden; and a sizeable tax base with above average wealth indices.
Post-sale, the district will have $51.5 million in general obligation unlimited tax and $3.8 million in general obligation limited tax debt outstanding. The amount of the levy for the district's limited tax debt is limited by a statutorily authorized non-referendum debt service extension base (DSEB), which is projected to provide adequate coverage for the outstanding limited tax debt service.
Therefore, these bonds are rated on parity with the district's general obligation unlimited tax pledge.