Moody's Investors Service said it has downgraded to A3 from Aa3 the general obligation unlimited tax rating on Warren Consolidated Schools, Mich.
The outlook remains negative.
Outstanding rated bonds are secured by the district's general obligation unlimited tax (GOULT) pledge that benefits from a dedicated unlimited levy. The A3 and negative outlook apply to $45 million of outstanding rated debt. In total, the district has $151.2 million and $840,000 of GOULT and GOLT debt outstanding, respectively.
The downgrade to A3 reflects the district's ongoing structural imbalances which have resulted in very narrow general fund reserves and liquidity.
Also incorporated is the district's sizable, but depreciating metro Detroit (GO rated Caa3/negative outlook) tax base; modestly declining student enrollment trends; average socioeconomic characteristics; and above average but manageable debt profile.
The negative outlook reflects the likelihood of near-term credit deterioration given an expected sizable draw in fiscal 2014 and possible further deterioration.
