MOODY'S ASSIGNS MIG-1 RATING TO TAX AND REVENUE ANTICIPATION NOTES OF LOS ANGELES UNIFIED SCHOOL DISTRICT, CA

Posted on: June 11, 2010, 5:41 pm

NEW YORK, Jun 11, 2010 -- Moody's Investors Service has assigned a MIG 1 rating to Los Angeles Unified School District's approximately $540 million issue of 2010-11 Tax and Revenue Anticipation Notes, Series A. The Notes are being issued to fund the District's mid-year cash flow needs and are secured by a pledge of unrestricted, fiscal 2011 general fund receipts. The key credit strengths reflected in the rating include the somewhat early setting aside of funds for Note repayment, the robust coverage levels during the months of the set-asides by available revenues in those months, the manageable size of the Note relative to estimated 2011 receipts, the relatively long history of conservative projections wherein actual year-end cash balances exceed projections and, critically, a significant amount of readily accessible alternate liquidity. The key credit weakness is the narrowing of projected general fund balance at the end of fiscal 2011. However, this weakness is mitigated by the abundance of the District's available liquidity outside of the cash flows, which is available to be drawn upon and under certain conditions, does not have to be repaid until the following year. Also reflected in the rating are the District's strained financial position, a proposed budget based on reasonable assumptions considering the uncertainties surrounding the State's budget., and the Board's demonstrated willingness to make difficult decisions in balancing the District's budget and maintaining financial flexibility...

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