Underlying Aa2 rating affirmed affecting $10.6 million of GO debt, post-sale
New York, May 07, 2013 --
Moody's Ratings
Issue: Refunding Bonds, Series 2013 (Federally Taxable) (General
Obligation - Unlimited Tax); Rating: Aa2; Sale
Amount: $7,270,000; Expected Sale Date:
05-15-2013; Rating Description: General Obligation
Opinion
Moody's Investors Service has assigned a Aa2 rating to Athens City
School District's (OH) $7.3 million General Obligation
Refunding Bonds, Series 2013. Concurrently, Moody's
has affirmed the Aa2 underlying rating on the district's additional
outstanding general obligation debt. Post-sale the district
holds $10.6 million of general obligation unlimited tax
debt.
SUMMARY RATINGS RATIONALE
The Series 2013 bonds are secured by the district's general obligation
unlimited tax pledge which benefits from a dedicated tax levy unlimited
as to rate or amount. The bonds will be used to advance refund
a majority of the district's outstanding General Obligation Refunding
Bonds, Series 2005 to accelerate debt repayment and for net present
value savings. The Series 2005 bonds were used to refund a portion
of the district's General Obligation School Facilities Construction
and Improvement Bonds, Series 2000 for net present value savings.
The Series 2000 bonds were voter approved in November 1999 for the purpose
of remodeling, improving and constructing additions to existing
school facilities.
The assignment and affirmation of the Aa2 rating reflects the district's
satisfactory General Fund cash reserves with strong historical voter support
for operating levies and taxes. Also incorporated in the rating
is the district's moderately-sized tax base with institutional
presence provided by Ohio University (seniormost revenue rated Aa3);
below-average socioeconomic characteristics affected by the large
university student population; and modest debt levels with average
principal amortization.
STRENGTHS
• Moderately-sized tax base with institutional presence provided
by Ohio University
• Satisfactory General Fund cash reserves
• Strong voter support for new and renewal operating taxes
CHALLENGES
• Below average resident wealth levels, negatively affected
by the large university student population
• Flat enrollment trends
What Could Move The Underlying Rating Up
• Substantial growth in the district's tax base and/or increasing
socioeconomic indicators
What Could Move The Underlying Rating Down
• Structural imbalance that reduces available reserves and liquidity
• Material erosion of the district's tax base and/or falling
socioeconomic indicators
PRINCIPAL METHODOLOGY USED
The principal methodology used in the underlying 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 the 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.
Andrew Thomas Van Dyck Dobos
Associate Analyst
Public Finance Group
Moody's Investors Service
100 N Riverside Plaza, Suite 2220
Chicago, IL 60606
U.S.A
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Jeffery Yorg
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 assigns Aa2 rating to Athens City School District's (OH) $7.3 million General Obligation Refunding Bonds, Series 2013