Moody's Investors Service has downgraded to Baa1 from A3 Clyde Park District, Ill.'s general obligation limited tax bonds.
The downgrade affects $2.5 million in outstanding debt. The bonds are secured by the district's general obligation limited tax pledge and benefit from a designated levy with an unlimited rate. The amount of the levy is limited by the district's statutorily authorized non-referendum debt service extension base (DSEB); however, there is no rating distinction between the district's limited tax and unlimited tax due to the presence of the designated levy and unlimited rate.
The downgrade to Baa1 reflects a substantial decline in the district's full value, limited revenue raising ability, and the absence of a plan to offset any expected budget pressures, based on limited communication with the district's management team.
The rating also takes into account the district's weak socio-economic profile, manageable debt burden, satisfactory general fund reserves, and pressured liability insurance fund. The negative outlook reflects the potential for further declines in taxable value, as well as future budgetary pressures given the district's limited ability to raise operating revenues.