Moody’s Investors Service recently announced a downgrade to Reavis High School’s bond rating. Generally when a bond is downgraded, investors demand a higher yield making it more expensive for the bond issuer to raise money.
Moody’s is a bond credit rating business that provides research on commercial and government bonds.
In a press release issued last week, Moody’s stated the downgraded rating reflects “the district's declining General Fund reserves and depreciating tax base trends” among other considerations.
Moody’s downgraded Cook County School District 220 (Reavis) outstanding General Obligation Limited School Bonds from an Aa2 to an Aa3 on their standardized rating scale. Although three levels below Moody’s top bong rating of Aaa, an Aa3 bond is still considered a high quality bond with very low credit risk.
Moody’s also affirmed a rating of Aa3 on the $14.5 million Limited School Bonds that District 220 is expected to sell this month. Proceeds of the 2013 bond sale are predicted to pay down older outstanding bonds and fund various capital projects.
In the press release, Moody’s characterized District 220’s creditworthiness strengths and challenges and as follows:
Factors that could drive the rating up or down:
What Could Move the Rating UP
What Could Move the Rating DOWN
Source: Moody's Investor Service press release