NEW YORK - Moody's Investors Service has downgraded to A2 from A1 the rating on Romulus Community Schools, Mich.'s general obligation unlimited tax debt.
The outlook remains negative. The A2 rating and negative outlook apply to $12.1 million of outstanding general obligation debt.
The outstanding bonds are secured by the district's general obligation unlimited tax pledge. The downgrade to the A2 rating primarily reflects the district's steadily weakened financial position and limited general fund reserves, which have followed multiple years of declines in student enrollment.
Also incorporated in the current rating is the district's modestly sized and depreciating tax base in the metro Detroit (GO rated B2, with rating under review for possible downgrade) region, and manageable debt burden.
The retention of the negative outlook reflects our expectation that the district's general fund position will continue to be challenged in the near term due to further anticipated enrollment declines, as well as the possibility of lost revenue associated with a voter-approved levy.