Moody's Investors Service said it has assigned a Aa3 rating to Chabot Las Positas Community College District, Calif.'s $300 million 2013 general obligation refunding bonds and downgraded to Aa3 from Aa2 the rating on the district's $438 million in outstanding general obligation debt.

The proceeds of the 2013 bonds will be used to refund a portion of the district's outstanding GO debt for debt service savings.

The downgrade to Aa3 from Aa2 reflects the extremely narrow financial position as a result of four consecutive years of operating deficits and a negative general fund cash position for the district at the end of fiscal year 2012.

The Aa3 rating additionally factors in the district's sizable tax base, which benefits from its proximity to the San Francisco Bay Area's employment centers.

The tax base is large for a Moody's-rated California community college district and for the rating category nationally. The district's above average resident income level is also factored in the rating. The district's moderate debt burden is additionally factored into the rating. The general obligation bonds are secured by an unlimited property tax pledge of the district.

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