Moody's Investors Service has downgraded to A2 from A1 the rating on Portsmouth City School District, Ohio's general obligation bonds, affecting $2.9 million in Moody's rated debt.
The bonds are secured by the district's general obligation unlimited tax pledge. The district has an additional $10 million in parity debt outstanding that is not rated by Moody's but considered in the credit analysis.
The downgrade to A2 reflects the district's moderately-sized, stable tax base located in southern Ohio with resident income levels that are well below average; limited general fund cash and reserve levels; the district's operating levy at the 20-mill floor, allowing revenues to grow along with tax base appreciation; and a manageable debt burden with no plans for additional borrowing.
The assignment of the negative outlook reflects Moody's expectation that the district's finances will continue to remain pressured in the near-term, absent expected significant increases in state aid and expenditure reductions.