Moody's Investors Service said it has downgraded to Aa3 from Aa2 the underlying general obligation rating of Grand Haven Area Public Schools, Mich.

Concurrently, Moody's has assigned a Aa3 underlying rating with no outlook and Aa2 enhanced rating with positive outlook to the district's$8.9 million 2013 refunding bonds (unlimited tax general obligation).

The bonds are secured by the district's general obligation tax pledge that is unlimited as to rate or amount as authorized by voters. Proceeds of the bonds will be used to refund the district's outstanding Series 2005 school building and site bonds for anticipated interest savings. The district has $48.5 million of general obligation unlimited tax (GOULT) debt outstanding.

The downgrade to Aa3 reflects a narrowed financial position following material uses of available financial reserves in fiscal years 2012 and 2013. The rating also incorporates the district's sizeable tax base located west of the city of Grand Rapids (GOLT rated Aa2, stable), a recent trend of enrollment growth, moderate direct debt burden, and exposure to an underfunded cost-sharing retirement system.

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