Moody's Investors Service said it has upgraded Zion Park District, Ill.'s general obligation unlimited tax (GOULT) bonds to Baa3 from Ba1 and general obligation limited tax (GOLT) debt certificates to Baa3 from Ba2.
The rating impacts $1.1 million in outstanding debt. Concurrently, the outlook has been revised to stable.
The upgrade of the GOULT rating to Baa3 reflects improved cash reserves and some indications of stabilization in the district's moderately sized tax base, according to the rating agency. Those improvements are balanced against the district's continued credit challenges including limited revenue raising ability; taxpayer concentration and a degree of enterprise risk.
Also incorporated is a modest direct debt burden. The GOLT debt is also rated Baa3 given the presence of an all available funds pledge.
The revision of the outlook to stable reflects improvements to the district's financial operations and indications of stabilization in the tax base, which is expected to support the maintenance of adequate reserves, Moody's said.
Factors that Could Lead to an Upgrade
- Growth or diversification of the district's tax base
- Sustained operational balance that results in growth in operating
- liquidity and elimination of deficit fund balance positions
Factors that Could Lead to a Downgrade
- Further deterioration of the district's tax base
- Erosion of operating liquidity and/or growth in deficit fund balances
- Increase in the district debt or pension burden
