Moody's Investors Service said it downgraded the rating to Aa2 from Aa1 on the village of Lake Barrington, Ill. 's outstanding general obligation bonds, and assigned a Aa2 rating to the village 's $2.5 million general obligation special service area number three refunding bonds, Series 2014.
The bonds are secured by the village's general obligation unlimited tax pledge, which is backed by a property tax levy that is unlimited as to rate and amount. Debt service is expected to be paid from a special levy on Special Service Area Number Three, which has historically provided full coverage on the refunded bonds.
Proceeds of the bonds will refund a portion of the village's outstanding general obligation special assessment area number three refunding bonds, Series 2005 for estimated net present value savings. The Aa2 rating applies to $7.7 million of outstanding GO debt, inclusive of the current offering.
The Aa2 rating reflects the village's limited tax base that has declined in recent years, as well as a narrowed, though still satisfactory financial reserve level.
These trends have placed the village out-of-line with other Aa1 rated entities. Also incorporated in the rating is the village's above-average socioeconomic profile; satisfactory financial profile; significant financial flexibility afforded by the village's home rule status; modest debt burden with no plans for additional issuances; and limited exposure to underfunded state pension plans.
