CHICAGO - Moody's Investors Service downgraded Sangamon County School District 186, Illinois and warned of the possibility for further deterioration in part due to pressures from the state's fiscal struggles.
Moody's lowered on Feb. 18 the district's $70.5 million of general obligation limited tax bonds secured by debt service extension base revenues to A2 from A1 and assigned a negative outlook. The district's $1.2 million of debt certificates were lowered to A3 from A2.
The rating level reflects the district's "deteriorating financial position, with reserve levels and liquidity well below those of similarly rated entities," Moody's wrote.
"The A2 rating also incorporates the district's limited revenue raising flexibility and the potential for an increase in pension costs that may be shifted from the state of Illinois," Moody's said. The district's credit challenges are balanced against attributes that include a sizable tax base centered in the state capital of Springfield, and average debt burden with limited borrowing plans.
The lower rating on the district's certificates reflects the lack of a dedicated levy to pay debt service.
Moody's said the negative outlook stems from worries that the credit will continue to struggle with limited liquidity as it faces further pressures from the state, as the state is a major factor in the district's operating budget and overall economy.
Sangamon County School District 186 is a large pre-kindergarten through 12th grade district in central Illinois with an enrollment 15,200.
