Moody's Investors Service said it has downgraded to Aa3 from Aa2 the rating on Cook County High School District 220 (Reavis), Ill.'s general obligation limited tax debt.

Concurrently, Moody's assigned a Aa3 rating to the district's $14.5 million general obligation limited school bonds, Series 2013. The Aa3 rating applies to $27.7 million of outstanding GOLT debt, post-sale.

Debt service is secured by the district's GOLT pledge subject to the amount of its debt service extension base (DSEB). The rate is unlimited, but the levy is limited because annual debt service on the district's GOLT debt cannot exceed the DSEB.

The district's DSEB equals the amount of the district's debt service on non-referendum debt in levy year 1994 plus (beginning in 2009) an annual increase by the lesser of 5% or the consumer price index (CPI). For 2013, the district's DSEB equals $2.0 million.

Even without assuming annual growth, this DSEB amount provides sum sufficient debt service coverage throughout the maturity schedule for all outstanding GOLT debt, including the Series 2013 bonds. Proceeds of the current issue will fund various capital projects and will refund certain outstanding maturities of the district's GOLT School Bonds, Series 2008, Series 2010, and Series 2012.

The Aa3 rating reflects the district's declining general fund reserves; depreciating tax base trends; sizable tax base adjacent to the city of Chicago (GO rated A3/negative outlook); average socioeconomic characteristics; and manageable debt profile.

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