NEW YORK - Moody's Investors Service said it has assigned a Aa1 enhanced rating with a stable outlook and a A1 underlying rating to McCormick County School District, S.C.'s $4.3 million general obligation refunding bonds, Series 2012, and upgraded to A1 from A2 the underlying rating on the district's $5.5 million of previously issued general obligation debt.
The bonds are secured by the district's unlimited general obligation ad valorem tax pledge.
The upgrade to A1 reflects the school district's healthy financial position that is reflected in a trend of strong reserves in recent years due to conservative budgeting practices and formal fiscal policies.
The upgrade also reflects the district's average debt burden and rapid payout. Lastly, the rating incorporates the district's limited size tax base with below-average wealth indicators. Proceeds from the bonds will refinance the district's Series 2002 bonds for an expected net present value savings of $150,000 or 3.5% of refunded principal, with no extension of maturity.
The Aa1 enhanced rating is based on the additional security provided by the South Carolina School District Credit Enhancement Program (SCSDCEP).
The program assures timely debt service payment through county and state government coordination and is backed by sizable annual state appropriations under the state's Education Finance Act. As the SCSDCEP is a state-backed enhancement program, the program's rating shadows the state's rating and consequently carries the stable outlook that is assigned to the state's Aaa general obligation rating.