Moody's Investors Service said it has assigned an A2 underlying rating with a negative outlook and Aa2 enhanced (SBQLP) rating with a stable outlook to North Branch Area School District's $6.5 million refunding bonds, 2013, and downgraded to A2 from A1 the underlying rating on the district's previously issued debt and assigned a negative outlook.

Post-sale the district will have $41.5 million in outstanding general obligation debt.

The 2013 refunding bonds are secured by the district's general obligation tax pledge without limitation as to rate or amount.

The bonds will refund a portion of the district's 2003 refunding bonds for estimated net present value savings.

The downgrade of the underlying rating to A2 rating reflects the district's narrow financial position, declining enrollment, moderately sized tax base, and above average debt burden. The negative outlook is based on the expectation that district's tax base will continue to experience declines in the near term and its debt burden may continue to increase.

The Aa2 enhanced rating and stable outlook is based on the additional security provided by the state's School Bond Qualification and Loan Program (SBQLP).


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