NEW YORK - Moody's Investors Service said it has downgraded to A1 from Aa3 the underlying rating on Duluth Independent School District No. 709, Minn.'s outstanding general obligation and full-term certificates of participation (COPs) debt.
Concurrently, Moody's has assigned an enhanced MIG 1 rating to $22.7 million general obligation tax and aid anticipation certificates of indebtedness, series 2011B.
Moody's has also downgraded the rating on the district's outstanding COPs subject to annual appropriation to A2 from A1.
Post-sale, the district will have $86.4 million in general obligation bonds, $185.5 million in full-term COPs, and $37 million in COPs subject to annual appropriation outstanding. A negative outlook has been assigned.
The downgrade to the A1 general obligation rating reflects declining enrollment trends; steadily narrowing general fund reserves following six years of operating deficits; and high debt levels that are driven by the district's sizeable master facilities plan.
