Moody's Investors Service on Tuesday assigned a Baa1 rating and stable outlook ahead of plans by the California Municipal Finance Authority to act as conduit issuer on $44 million in revenue bonds to fund the South Central Los Angeles Regional Center for Persons with Developmental Disabilities, Inc. project.

The bonds expected to price April 17 will be issued by Community Impact Development II through the CMFA to finance the purchase and construction of office facilities for lease by Community Impact Development II to SCLARC, according to Moody's. The bonds will also finance capitalized interest through a portion of 2015 and fund a debt service reserve for the bonds.

SCLARC is a private, non-profit, community based organization that contracts with the State Department of Developmental Services to coordinate services for individuals with developmental disabilities and their families.

The Baa1 rating reflects the high reliance of SCLARC on funding from California which holds an A1 general obligation bond rating from Moody's, analysts said.

The rating is three notches lower than the rating of the state's general obligation debt to reflect that the state is not legally responsible for the debt.

The state is, however, mandated to provide the services that the regional centers are contracted to provide, analysts said. The rating also reflects the satisfactory legal structure and flow of funds, the state's relatively strong oversight of the regional centers, the essentiality of the services they provide, and the long history of the state funding for the regional centers with very few declines in the level of funding.

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