Moody's Investors Service said it has downgraded to A1 from Aa3 the rating on West Clermont Local School District, Ohio's general obligation tax debt and affirms the negative outlook.

Concurrently, Moody's assigned an A1 rating to the district's $3.97 million school improvement unlimited tax general obligation refunding bonds, Series 2013. The A1 rating and negative outlook applies to $36.5 million of outstanding general obligation debt, including current offering.

The current issue is secured by the district's general obligation unlimited tax pledge. Proceeds of the bonds will be used to refund a portion of the Series 2002 bonds for a net present value savings.

The downgrade to the A1 rating reflects the district's narrowing general fund cash reserve levels with little budgetary flexibility; sizeable residential tax base east of Cincinnati (GO rated Aa1/stable outlook) with average socioeconomic characteristics; and below average debt levels.

The negative outlook is based on the expectation that the district's general fund operations will remain highly pressured in the near term due to minimal expenditure flexibility and the limited success in securing additional local revenues through voter approval.

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