Moody's Investors Service said it has downgraded to A1 from Aa3 the underlying rating on Maple Lake Independent School District No. 881, Minn.'s outstanding general obligation debt.
Concurrently, Moody's has assigned an initial A2 rating to the district's $640,000 certificates of participation, Series 2012A. Post-sale, the district will have $14.4 million of general obligation debt, of which $14.1 million is Moody's-rated, and $640,000 of certificates of participation outstanding.
The certificates are secured by lease payments made by the district that are subject to annual appropriation by the district. Proceeds of the certificates will be used to finance energy improvement projects, including installation of water conservation equipment and exterior improvements to facilities.
The district expects to pay debt service using savings generated from the energy efficiencies gained from these projects.
Assignment of the initial A2 rating to the current issuance reflects the satisfactory legal provisions for bondholder security, essentiality of the financed projects, and risk of non-appropriation by the district.
The A1 underlying rating reflects its modestly-sized tax base with significant valuation declines, healthy financial operations, declining enrollment trend, and above average debt burden with no near-term plans for additional borrowing.