Moody's Investors Service said it downgraded to Aa3 from Aa2 Peoria Unified School District No. 11 (Maricopa County), Ariz.'s outstanding parity debt totaling approximately $168 million.

Moody's assigned a Aa3 rating to the district's school improvement bonds, Series 2013.

Concurrently, Moody's assigns a negative outlook to the district's long term ratings.

The current offering is secured by the district's unlimited property tax pledge. Bond proceeds will be used for various upgrade and renovation projections throughout the district.

The downgrade to Aa3 reflects significant declines in a still considerably-sized tax base adjacent to the Phoenix metro area and narrow reserve levels and negative net cash position. The rating also factors in the district's slightly above average wealth measures and a manageable debt burden.

The negative outlook reflects the district's structural imbalance that will challenge the district to improve its cash position and reduce the district's above average dependence on short term cash flow borrowing.

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