LOS ANGELES — Moody's Investors Service upgraded Manhattan Beach Unified School District, Calif.'s general obligation bonds to Aa1 from Aa2 affecting $151.2 million in debt.
Moody's also removed the positive outlook because it doesn't generally assign outlooks on local government credits with this amount of debt outstanding, according to the Aug. 7 report.
The upgrade reflects solid growth in the district's large tax base over the past four years, Moody's analysts wrote.
It also reflects Moody's "expectation that this trend will continue based on strong residential wealth levels and a healthy financial position, despite some draw on reserves."
The credit is also supported by additional liquidity from the district's foundation and endowment and manageable debt levels.
The upgrade also incorporates the district's strong management team.
Also cited for the GO rating are the strength of the voter-approved, unlimited property tax pledge securing the bonds and the well-established levy and collection history for the debt service levy.
The county rather than the district levies, collects, and disburses the district's property taxes, including the portion constitutionally restricted to debt service on general obligation bonds.
Large and sustained increase in reserves or prolonged increases in assessed value could result in further upgrades.
Downward rating pressure would come if the district experiences a deterioration of reserves and liquidity or significant and prolonged assessed value declines.
