Moody's Investors Service said it has downgraded to A1 from Aa3 the underlying general obligation rating of East Grand Rapids Public Schools, Mich.
Debt service on the district's general obligation unlimited tax (GOULT) debt is secured by a property tax pledge with the ability to levy without limitation as to rate or amount.
As of June 30, 2014, the district had $73.6 million of outstanding GOULT debt, $15.5 million of which is rated by Moody's.
The A1 rating reflects the district's ongoing operating deficits resulting in narrowed, though still adequate reserves, limited budgetary flexibility and elevated debt burden. The A1 also incorporates the district's moderately sized tax base near Grand Rapids (Aa2, stable), affluent demographic profile, stable enrollment trend and above average pension burden.
