Moody's Investors Service said it has downgraded to Baa2 from Baa1 the rating on Clyde Park District, Ill.'s general obligation limited tax (GOLT) bonds.
The outlook is negative. The rating action affects $1.9 million in outstanding debt.
The bonds are secured by the district's GOLT pledge. The designated debt service levy is unlimited by rate but is limited by the amount of the district's statutorily authorized, non-referendum debt service extension base (DSEB). The amount of the district's DSEB provides sufficient coverage of maximum annualdebt service (MADS) on the outstanding GOLT debt.
The Baa2 rating reflects the district's declining tax base; weak socio-economic profile; limited revenue raising ability; narrow liquidity; and highly leveraged tax base, as reflected by an elevated overall debt burden. These challenges are balanced against a manageable level of rapidly retired direct debt and a low pension burden. The negative outlook reflects the expectations for continued credit pressure given the district's tax base declines and limited ability to raise operating revenues with a weak socio-economic profile.
The removal of the rating under review is a result of the receipt of the district's fiscal 2012 audited financial statements. The district's rating was placed under review on December 27, 2013, due to the lack of fiscal 2012 financial results. The district has since provided fiscal 2012 audited financial statements, and Moody's now has sufficient information to maintain the rating.
