Approximately $11.2 million of rated debt affected
New York, May 07, 2013 --
Moody's Investors Service affirms the A2 rating on Greenfield Union
School District's general obligation bonds outstanding in the approximate
amount of $11.2 million. The ad valorem bonds are
secured by the district's unlimited property tax pledge.
RATINGS RATIONALE
The affirmation primarily reflects the district's sufficient reserves
and liquidity outside of the general fund that have allowed it to manage
cash flow amid stressed state funding. The rating and affirmation
continue to reflect the district's pressured local economy,
small tax base, below average wealth indices and manageable debt
burden.
The negative outlook reflects the district's trend of unbalanced
financial operations and the expectation that finances will remain stressed
in the foreseeable future. While we expect the district to balance
operations going forward, we expect reserves and liquidity to remain
narrow, leaving the district with weak financial flexibility.
STRENGTHS
- Available reserves and liquidity in other governmental funds
CHALLENGES
-Assessed value is small for a California school district
-Weak socioeconomic indices
-Narrow liquidity due to unbalanced financial operations and state
funding deferrals
Located in the Salinas Valley of Monterey County (Aa2 Issuer Rating),
the district provides K-8 education to approximately 3,232
students in the city of Greenfield and unincorporated portions Monterey
County. The District's rural tax base is primarily residential
and agricultural based.
OUTLOOK
The negative outlook reflects the district's trend of unbalanced
financial operations and the expectation that finances will remain stressed
in the foreseeable future. While we expect the district to balance
operations going forward, we expect reserves and liquidity to remain
narrow, leaving the district with weak financial flexibility.
What could move the rating -- UP
-Substantial and sustained increase in liquidity
-Trend of substantial and sustained growth in assessed valuation
-Significant increase in socioeconomic indices
What could move the rating -- DOWN
-Continued trend of unbalanced financial operations
-Further narrowing of liquidity
-Protracted decline in the district's assessed valuation
The principal methodology used in this rating was General Obligation Bonds
Issued by US Local Governments published in April 2013. Please
see the Credit Policy page on www.moodys.com for a copy
of this methodology.
REGULATORY DISCLOSURES
For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides certain regulatory disclosures in relation
to the rating action on the support provider and in relation to each particular
rating action for securities that derive their credit ratings from the
support provider's credit rating. For provisional ratings,
this announcement provides certain regulatory disclosures in relation
to the provisional rating assigned, and in relation to a definitive
rating that may be assigned subsequent to the final issuance of the debt,
in each case where the transaction structure and terms have not changed
prior to the assignment of the definitive rating in a manner that would
have affected the rating. For further information please see the
ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Shelby Schwabauer
Associate Analyst
Public Finance Group
Moody's Investors Service, Inc.
One Front Street
Suite 1900
San Francisco, CA 94111
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Michael Wertz
Asst Vice President - Analyst
Public Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's affirms the A2 rating on Greenfield Union School District, CA's general obligation bonds and assigns a negative outlook