Moody’s Investors Service has revised its outlook on Forest Lake Independent School District 831’s underlying Aa3 rating to negative as the Minnesota district heads to market with a $3.4 million general obligation issue to finance the acquisition of an ice arena and field house.
The action impacts $30 million of debt. The bonds are bolstered to Aa2 with by the Minnesota district’s participation in the state school credit enhancement program.
“The negative outlook reflects the additional risk the district has taken on in purchasing and operating an ice arena. The outlook additionally reflects the possibility that declines in operating reserves in the near term may bring reserves out of line with sector medians,” Moody’s wrote.
If the district can demonstrate positive operations for the ice arena it could see its outlook stabilize.