LOS ANGELES — Moody's Investors Service upgraded a Nampa, Idaho school district's bonds to Baa1 from Baa3 and revised the outlook to positive, affecting $112.5 million in debt.

Canyon County School District No. 131 serves a portion of Canyon County and is headquartered in Nampa, about 22 miles west of Boise, the state capitol.

"The upgrade of the rating reflects the rapid and significant improvement in the district's financial operations, evidenced by sharply increased reserves and liquidity. The district acted swiftly to eliminate a negative fund balance, implement stronger internal controls and budget a contingency within expenditures to support continued restoration of reserves over the next several years," according to Moody's analysts. "The rating also incorporates the district's sizeable tax base that has resumed growth, below average wealth levels and a slightly elevated debt burden that is mitigated by rapid principal amortization and no plans to issue additional debt for the next three to five years."

The positive outlook reflects the rating agency's expectation that financial operations will continue to improve, reserve levels will gradually increase over the next several fiscal years and that these improved finances will be further supported by the district's strengthened internal controls and sizeable tax base, Moody's analysts said.

Significant, sustained improvement in operating reserves and liquidity and a material reduction in debt levels could result in another rating upgrade. Deterioration of reserves below current levels or a decline in liquidity could cause the rating to fall.

The bonds are secured by the district's full faith, credit and unlimited property tax pledge.

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