Moody’s Investors Service last week upgraded to A2 from A3 its underlying general obligation rating on Maple Lake Independent School District 881 as it prepares to sell $8.7 million of new debt.

The upgrade also affects $8.5 million of outstanding GOs.

Moody’s assigned an enhanced Aa2 rating to the new issue because of additional backup coverage provided by the state’s school district enhancement program, which provides a pledge of an unlimited appropriation from Minnesota’s general fund if the district is unable to meet debt service requirements.

The new debt will finance various renovations and the expansion of school facilities, including the construction of 18 additional classrooms. Analysts attributed the upgrade to Maple Lake’s moderately sized and growing tax base, strong financial position evidenced by solid reserve levels, and increasing enrollment trends. The district, which has an above-average debt burden but limited future borrowing plans, is located northwest of the Twin Cities.

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