Moody's Investors Service said it has downgraded to A2 from A1 the rating on Greenfield Union School District, Calif.'s general obligation bonds outstanding in the approximate amount of $1.18 million.

The bonds are secured by the district's unlimited property tax pledge.

The downgrade reflects the district's narrow and declining liquidity and limited financial flexibility resulting in structurally unbalanced operations driven by state funding reductions.

It also incorporates the school district's small but stabilizing tax base that has undergone significant recent pressure, low socioeconomic indices, sufficient reserves and manageable debt burden.

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