NEW YORK - Moody's Investors Service said it has upgraded to A1 from A2 the rating on West Allis-West Milwaukee School District, Wis.'s general obligation unlimited tax debt and revised the outlook to stable.
The rating applies to $17.4 million of outstanding general obligation unlimited tax debt rated by Moody's.
The district's GO debt is secured by its general obligation unlimited tax pledge.
The A1 rating is based on the district's large tax base with average residential income levels; stable financial operations despite material declines in reserves due to building acquisition and capital expenditures in fiscal 2011; increasing enrollment trends; and manageable debt burden. The rating also reflects the recent settlement of litigation related to high risk investments purchased by the district's Other Post-Employment Benefits (OPEB) Trust, and the district's decision to tie its moral obligation pledge to the performance of these investments. As a result of the recent settlement, the district has been entirely and permanently released from its moral obligation to its OPEB Trust.
Additionally, as part of the settlement, the district has received its share of a settlement payment, and will receive additional settlement proceeds backed by a letter of credit and supplemental payment pledge upon the resolution of further outstanding litigation related to the CDO transaction.
The stable outlook reflects the expectation of balanced financial operations moving forward, as well as the expectation of partial reserve restoration in December 2012 due to an outstanding lease purchase agreement.
