Moody's Investors Service has downgraded to Aa1 from Aaa the rating on Mason City School District, Ohio's outstanding general obligation unlimited tax debt.

The district has $107.3 million of outstanding long term general obligation debt.

The district's outstanding long term bonded debt is secured by its general obligation unlimited tax pledge.

The downgrade to Aa1 reflects the district's exposure to two underfunded statewide multi-employer cost-sharing pension plans. Also incorporated in the rating is the district's healthy general fund cash reserves; sizable tax base outside of Cincinnati (GO rated Aa1/rating under review for downgrade); above average socioeconomic characteristics; and above average debt levels due to recent capital borrowing to accommodate rapid enrollment growth over the previous decade.

The district's rating was placed on review for downgrade due to its large adjusted net pension liability relative to its rating category as part of our new approach to analyzing state and local government pension liabilities.

The review was completed with the downgrade to Aa1, and Moody's believe the Aa1 rating incorporates the district's sizeable adjusted net pension liability as well as the district's other long term credit fundamentals.

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