NEW YORK - Moody's Investors Service said it has assigned an A1 underlying rating to Joint School District No. 3 (Kuna), Ada and Canyon Counties, Idaho's general obligation refunding bonds, Series 2012 expected to be issued in the amount of $8.0 million, and downgraded to A1 from Aa3 the district's outstanding parity debt currently totaling $46.2 million.

The current offering will also receive the Aaa enhancement rating with stable outlook of the Idaho School Bond Guaranty Act.

The bonds are secured by the district's full faith, credit and unlimited property tax pledge, and will advance refund certain maturities of the district's outstanding general obligation school bonds, Series 2004.

The downgrade of the district's rating reflects the significant and protracted declines in property tax values, along with an above average debt burden. The A1 rating reflects relatively weak socioeconomic indicators and stable financial operations with limited flexibility.

The Aaa enhanced rating reflects the guaranty of the Idaho School Bond Guaranty Act, which pledges the State of Idaho's (Aa1 issuer rating with stable outlook) sales tax revenues for debt service when due on qualified school districts' voter-approved general obligation bonds.

Additionally, the state's Public School Permanent Endowment Fund is required to provide funds to the state through the purchase of a state note issued for payment of districts' debt service if funds are not available from other state sources. The program rating reflects the state's ample sales tax revenue coverage of guaranteed debt service payments, strong oversight of school districts, and the program's mechanics.

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