Moody's Investors Service said it downgrades to A2 from A1 the underlying rating of Spokane County School District No. 358 (Freeman), Wash.'s general obligation bonds.

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

The downgrade reflects the district's general credit characteristics that have not kept pace with rated peers.

Although the district's wealth measures are above average, its tax base is substantially smaller than the median A1 school district nationally, and its financial operations are relatively weak with thin reserve levels. Additionally, the district is experiencing a decline in enrollment, and its debt burden is high with slow amortization.

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