Moody’s Investors Service Tuesday downgraded California’s Santa Ana Unified School District general obligation rating to Aa3 from Aa2 ahead of plans to issue $19.5 million of bonds on Oct. 10.

The downgrade affected around $332.5 million in debt, according to Moody’s analysts. The rating agency has a negative outlook on all of the school district’s debt.

Proceeds of the current offering will be used to refund the school district’s Series 2002 GO bonds.

The Moody’s downgrade reflects the recent and projected weakening of the district’s financial position, according to the report.

The projected fiscal 2012 and 2013 ending fund balance have declined from historic levels.

Moody’s analysts also said they anticipate considerable expenditure reductions and that it will take several years for the district to regain budgetary balance and rebuild reserves to historic levels.

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