New York — Moody's Investors Service has downgraded to Baa1 from A3 the rating on the $113 million of outstanding general obligation bonds of Inglewood Unified School District, CA. The outlook is negative.
Rating Rationale
The downgrade and the assignment of a negative outlook reflect the district's continued fiscal crisis, and the possibility it could be forced into state receivership to remain solvent. Other key credit factors include the district's weak wealth levels, strong tax base, and the strength of general obligation pledge for school districts in California.
Strengths
• Strong tax base within Los Angeles did not experience significant decline as a result of the recession and national housing collapse
• Average debt burden and low lease burden
Challenges
• Extreme fiscal stress is a continued threat to solvency
• Persistently declining enrollment
• Low wealth indicators
What Could Make the Rating Go Up
• Significant improvement in General Fund net cash and reserves
• Improvement in wealth indicators
What Could Make the Rating Go Down
• Inability to correct financial imbalance resulting in a state takeover
• Inability to access short-term financial markets for liquidity
• Any interruption of debt service payments
The principal methodology used in rating Inglewood Unified School District, CA was General Obligation Bonds Issued by U.S. Local Governments rating methodology published in October 2009. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found on Moody's website.
Regulatory Disclosures
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