MOODY'S DOWNGRADES LAKEVIEW LOCAL SCHOOL DISTRICT'S (OH) G.O. RATING TO Baa1 FROM A3; OUTLOOK NEGATIVE

Posted on: December 29, 2009, 3:17 pm

NEW YORK, Dec 29, 2009 -- Moody's Investors Service has downgraded the rating to Baa1 from A3 on Lakeview Local School District (OH) affecting $3.1 million in outstanding general obligation debt, secured by the district's general obligation unlimited tax pledge; the outlook has been revised to negative. The downgrade reflects the decline of previously satisfactory financial margins evident to a deficit balance equal to negative 13.0% of General Fund revenues for the FY2008 GAAP audit. The Baa1 rating additionally reflects the expectation that the school district's moderately-sized and mature $823 million tax base located in Trumbull County (rated A2) will see little growth in coming years as new development is not expected and appreciation of existing property will be limited. Moody's notes that the district's tax base is characterized by resident wealth and above average income indices. However, enrollment has been declining in the district, which is further evidence that new development prospects are minimal. The rating also reflects the village's low debt burden (0.5% of Full Value), which is not expected to increase in the near-term. All of the school district's debt is fixed rate and the district is not party to any derivative agreements...

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