Moody's Investors Service said it has downgraded Wauseon Exempted Village School District, Ohio's general obligation rating to A1 from Aa3.

The district has $23.4 million of total outstanding debt secured by the district's general obligation unlimited tax pledge, of which $16.9 million is rated by Moody's.

The downgrade to A1 reflects the district's weakened financial position due to ongoing operating deficits, including a reported operating deficit in fiscal 2013, and a projected deficit for fiscal 2014.

The district projects finances to stabilize and remain sufficient after fiscal 2014 as a result of increased state revenue in the state's fiscal 2014-2015 biennium budget.

The A1 rating incorporates the district's small tax base in northwestern Ohio (GO rated Aa1/stable outlook), below average wealth levels and socioeconomic indicators, and an elevated debt burden with below average principal payout.

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