Approximately $113 million of rated, outstanding debt affected
New York, June 28, 2012 -- Moody's Investors Service has downgraded to Baa1 from A3 the rating on
the $113 million of outstanding general obligation bonds of Inglewood
Unified School District, CA. The outlook is negative.
RATING RATIONALE
The downgrade and the assignment of a negative outlook reflect the district's
continued fiscal crisis, and the possibility it could be forced
into state receivership to remain solvent. Other key credit factors
include the district's weak wealth levels, strong tax base,
and the strength of general obligation pledge for school districts in
California.
STRENGTHS
- Strong tax base within Los Angeles did not experience significant
decline as a result of the recession and national housing collapse
- Average debt burden and low lease burden
CHALLENGES
- Extreme fiscal stress is a continued threat to solvency
- Persistently declining enrollment
- Low wealth indicators
WHAT COULD MAKE THE RATING GO UP
- Significant improvement in General Fund net cash and reserves
- Improvement in wealth indicators
WHAT COULD MAKE THE RATING GO DOWN
- Inability to correct financial imbalance resulting in a state
takeover
- Inability to access short-term financial markets for liquidity
- Any interruption of debt service payments
The principal methodology used in rating Inglewood Unified School District,
CA was General Obligation Bonds Issued by U.S. Local Governments
rating methodology published in October 2009. Other methodologies
and factors that may have been considered in the process of rating this
issuer can also be found on Moody's website.
REGULATORY DISCLOSURES
The Global Scale Credit Ratings on this press release that are issued
by one of Moody's affiliates outside the EU are endorsed by Moody's
Investors Service Ltd., One Canada Square, Canary Wharf,
London E 14 5FA, UK, in accordance with Art.4 paragraph
3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies.
Further information on the EU endorsement status and on the Moody's
office that has issued a particular Credit Rating is available on www.moodys.com.
For ratings issued on a program, series or category/class of debt,
this announcement provides relevant 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 relevant 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 relevant 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.
Information sources used to prepare the credit rating are the following:
parties involved in the ratings, public information, confidential
and proprietary Moody's Investors Service's information.
Moody's Investors Service considers the quality of information available
on the credit satisfactory for the purposes of maintaining a credit rating.
Moody's adopts all necessary measures so that the information it uses
in assigning a credit rating is of sufficient quality and from sources
Moody's considers to be reliable including, when appropriate,
independent third-party sources. However, Moody's
is not an auditor and cannot in every instance independently verify or
validate information received in the rating process.
Please see the ratings disclosure page on www.moodys.com
for general disclosure on potential conflicts of interests.
Please see the ratings disclosure page on www.moodys.com
for information on (A) MCO's major shareholders (above 5%) and
for (B) further information regarding certain affiliations that may exist
between directors of MCO and rated entities as well as (C) the names of
entities that hold ratings from MIS that have also publicly reported to
the SEC an ownership interest in MCO of more than 5%. A
member of the board of directors of this rated entity may also be a member
of the board of directors of a shareholder of Moody's Corporation;
however, Moody's has not independently verified this matter.
Please see Moody's Rating Symbols and Definitions on the Rating Process
page on www.moodys.com for further information on the meaning
of each rating category and the definition of default and recovery.
Please see ratings tab on the issuer/entity page on www.moodys.com
for the last rating action and the rating history.
The date on which some ratings were first released goes back to a time
before Moody's ratings were fully digitized and accurate data may not
be available. Consequently, Moody's provides a date that
it believes is the most reliable and accurate based on the information
that is available to it. Please see the ratings disclosure page
on our website www.moodys.com for further information.
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.
Travis George
Associate Analyst
Public Finance Group
Moody's Investors Service
Public Finance Regional Office
One Front Street, Suite 1900
San Francisco, CA 94111
U.S.A
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Eric Hoffmann
Senior Vice President
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 downgrades to Baa1 from A3 the general obligation bond rating for Inglewood Unified School District, CA and assigns a negative outlook