Moody's Investors Service said it has downgraded to A3 from A2 Harris County Municipal Utility District #158, Texas' underlying general obligation rating.
The rating affects $9.75 million in outstanding general obligation debt.
The bonds are secured by the proceeds of an annual ad valorem tax, levied upon all taxable property located within the district, which under Texas law is not limited as to rate or amount.
The A3 rating reflects the district's deteriorating financial position as demonstrated by multiple consecutive years of operating deficits as the district utilized fund balance for operating expenditures.
The rating considers the mature district's moderately sized tax base as well as ample taxing margin. The rating is indicative of the manageable direct debt burden with the anticipation of future debt to be issued.
