Moody's Investors Service said it has downgraded to A2 from A1 the underlying rating on Eaton Rapids Public Schools, Mich.'s general obligation unlimited tax debt.

Concurrently, Moody's has assigned an A2 rating to the district's general obligation unlimited tax school building and site bonds, Series 2013. Additionally, Moody's has assigned an Aa2 enhanced rating with a positive outlook to the Series 2013 bonds. Post-sale, the district will have $49.8 million of general obligation debt outstanding, of which $7.8 million is rated by Moody's.

The Series 2013 bonds are secured by the district's general obligation unlimited tax pledge. The bonds were voter authorized in November 2012 to finance technology, security and school bus upgrades within the district.

The downgrade to A2 reflects the district's narrow general fund reserves which are expected to remain pressured due primarily to annual declines in student enrollment. Also incorporated in the rating is the district's moderately-sized, depreciating tax base south of Lansing (GOLT rated A1); average socioeconomic characteristics; and elevated debt levels with slightly below average principal amortization.

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