Moody's Investors Service said it has downgraded to Aa3 from Aa2 Cleveland County Independent School District No. 29 (Norman), Okla.'s general obligation bonds.
The downgrade affects $83.5 million of outstanding GO bonds. It assigned a Aa3 to the district's $8 million general obligation combined purpose bonds, Series 2015.
The downgrade to Aa3 reflects Cleveland County Independent School District No. 29's weak financial reserves from consecutive years of operating deficits and our expectation that reserve levels will continue to erode in fiscal 2015.
The Aa3 rating also incorporates the district's limited operating tax rate flexibility, sizeable tax base that benefits from the institutional stability of the University of Oklahoma, and a manageable debt profile despite plans for additional near term borrowing.
The Aa3 rating further incorporates the district's reliance on capital market access to annually issue general obligation bonds sufficient to make rental payments on its outstanding lease revenue bonds.
