Moody's Investors Service said it has downgraded to Aa3 from Aa2 the rating on Clackamas County School District No. 62 (Oregon City), Ore.'s unlimited tax general obligation bonds outstanding in the estimated amount of $8.5 million, post-refunding.

Moody's has assigned a Aa3 rating to the district's GO refunding bonds, Series 2013. The bonds are secured by the district's full faith, credit, and unlimited property tax pledge.

Proceeds will refund certain maturities of the district's outstanding GOs for annual debt service savings. The current offering also received the Aa1 enhancement rating with stable outlook of the Oregon School Bond Guaranty Program.

The downgrade to Aa3 primarily reflects the district's trend of operating deficits that have resulted in general fund reserve levels that are below average relative to similarly rated peers nationally. The district's moderately-sized tax base, moderate wealth levels and a manageable debt burden were also factored into the rating.

The Aa1 enhanced rating with stable outlook for the Oregon School Bond Guaranty Program reflects the state's full faith, credit and unlimited taxing power which is pledged to guarantee qualified school districts' bond debt service when due. Key aspects of the program include third-party notification for unpaid debt service and the state's oversight of school districts.

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