(CORRECTED) MOODY'S DOWNGRADES SAN DIEGO UNIFIED SCHOOL DISTRICT RATING
SAN DIEGO – Moody's Investor Service today issued a credit downgrade for the General Obligation Bonds of the San Diego Unified School District from Aa 1 to Aa2. According to Moody's, the one notch downgrade reflects "the district's substantially narrowed financial flexibility after material draws on reserves in recent years."
The credit downgrade does not impact existing debt but could impact future credit issuances of the district should the rating not be upgraded before a new issue. In the statement issued by Moody's, the downgrade was based on the district practice of funding ongoing expenditures with one time sources. Moody's did indicate that the district's debt portfolio was "uncomplicated and manageable" and that the rating could improve with a "materially strengthened financial position" in the future.
"The credit rating agencies periodically review the financial position of public agency borrowers to make adjustments based on changing circumstances,' said Ron Little, Chief Financial Officer for the district. "This rating downgrade, while disappointing, is understandable given the continuing fiscal challenges faced by the district and the pending midyear K-12 education budget cuts potentially coming from the state."
According to Little, the downgrade has no immediate financial impact on the district.
"This credit downgrade does underscore the importance of sound and prudent budget solutions for our 2012/13 budget now under development," said Little. "We have been actively developing budget reduction strategies for the Board of Education to consider that would address the concerns raised by Moody's regarding the district's financial position."
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CONTACTS: Ron Little, CFO, 619-725-7597; Bernie Rhinerson, Chief of Staff, 619-300-7015You are a subscriber to the news release mailing list for the San Diego Unified School District. To unsubscribe, send a message to "media@lists-sandi-net" with the word "unsubscribe" in the body of the message. For an archive of these releases, go to http://sdusd-news.blogspot.com/