Moody's Investors Service said it has downgraded Kalamazoo City School District, Mich.'s general obligation rating to Aa3 from Aa2 and assigned a stable outlook.
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Concurrently, Moody's has assigned a Aa3 with a stable outlook to the district's $41.2 million 2015 refunding bonds (unlimited tax general obligation). Post-sale the district will have $168 million in outstanding GO debt.
The Aa3 rating reflects the district's above average debt burden that is expected to grow, sound though somewhat weakened financial operations, and elevated pension liabilities related to the state's cost sharing retirement plan. The Aa3 rating also reflects the district's satisfactory reserves and sizable tax base with institutional presence.
