Moody’s Investors Service assigned an A2 underlying rating to Oklahoma County Independent School District No. 41’s $4.7 million of building bonds, and downgraded to A2 from A1 the district’s outstanding parity debt, affecting a total of $17.9 million.

Proceeds from the bonds will be used to retire the September 2011 maturity of the district’s existing lease revenue bonds that were used to construct and equip various school facilities.

The bonds are secured by a continuing and direct annual ad-valorem tax, levied on all taxable property within the district, without limitation as to rate or amount.

The rating and downgrade reflects elevated debt burdens due to recent significant issuance of lease revenue bonds, a complex debt profile and structure that relies on the issuance of future general obligation bonds for the retirement of the lease revenue bonds, and market access exposure.

The ratings also reflect the district’s moderately sized tax base in an area that serves as the industrial hub, a history of satisfactory financial reserves that is expected to increase in the near term and remain flat over the medium term despite persisting state budgetary challenges, and the absence of operating tax margins.

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