Moody's Investors Service said it upgraded to Aa3 from A1 Magnolia Independent School District, Texas's general obligation rating and assigned a Aa3 rating to the district's $9.0 million unlimited tax refunding bonds, Series 2012.
The upgrade to Aa3 affects $162.6 million in outstanding general obligation debt, inclusive of the current issue.
Concurrently, Moody's assigns the Aaa enhanced rating based on the guarantee of the Texas Permanent School Fund (PSF) to the current issue.
Proceeds from the sale of the bonds will be used to advance refund certain maturities of the district's Series 2004 bonds for an estimated net present value savings of 12.0%.
The bonds are direct obligations of the district payable from and secured by the proceeds of a continuing, direct annual ad valorem tax levied, without legal limitation as to rate, against all taxable property within the district.
The upgrade reflects the district's sizable tax base that continues to experience positive annual growth, consecutive years of operating surpluses resulting in bolstered financial reserves, an above average socioeconomic profile, and an elevated yet manageable debt profile without plans for additional near term borrowing.