Moody's Investors Service said it has downgraded Marion County School Board, Fla.'s certificates of participation (COPs) rating to A2 from A1, affecting $113.5 million of outstanding certificates.
The certificates are secured by annually appropriated lease payments from the School Board (lessee) to the School Board Leasing Corporation (lessor), and are effectively paid from a portion of the district's 1.50 capital outlay millage.
Concurrently, the agency has also downgraded the district's issuer rating to A1 from Aa3. The issuer rating reflects the district's implied general obligation credit assessment. The negative outlooks have been removed.
The issuer rating downgrade to A1 is primarily based on the declining financial condition of the district after successive operating deficits.
The rating also incorporates the district's weakened tax base, below average socio-economic indices, and modest debt burden. Additionally, the A2 COP rating is based on a diminished but still adequate level of capital outlay millage available to repay the certificates, as well as the strength of the master lease, which is highly asset-backed, and the above average payout on the outstanding certificates.
