Moody's Investors Service has downgraded to A1 from Aa3 Dewitt Public Schools, Mich.’s general obligation debt and assigned an A1 underlying rating and Aa2 enhanced (SBQLP) rating with a stable outlook to its $6.4 million 2012 refunding bonds.
Post-sale the district will have $51.5 million in outstanding general obligation debt, $28.5 million of which is Moody's rated.
The 2012 refunding bonds are secured by the district's general obligation tax pledge without limitation as to rate or amount. The bonds will refund certain prior outstanding obligations of the district.
The downgrade to A1 reflects district's moderately sized and declining tax base; trend of operating deficits in the general fund resulting in reduced reserves; and elevated debt burden.
The A1 rating also incorporates the district's above average demographic profile and a long-term trend of stable enrollment. The Aa2 enhanced rating and stable outlook is based on the additional security provided by the state's School Bond Qualification and Loan Program (SBQLP).