Rating Action: Moody's assigns Aa1 Issuer Ratings to three CA school districts; affirms outstanding Aaa GOULT ratingsGlobal Credit Research - 05 Mar 2021New York, March 05, 2021 -- Moody's Investors Service has assigned Aa1 Issuer Ratings and stable outlooks to Menlo Park City School District, CA; Tamalpais Union High School District, CA; and Newport-Mesa Unified School District, CA in conjunction with the implementation of our new US K-12 Public School Districts Methodology published January 26, 2021. Moody's has also affirmed all of these issuers' GOULT debt ratings at Aaa. The long-term rating outlooks for all of these issuers are stable.These actions affect issuers with approximately $570.9 million in total, Moody's-rated debt.Please click on this link http://www.moodys.com/viewresearchdoc.aspx?docid=PBM_PBM907005458 for the List of Affected Credit Ratings. This list is an integral part of this Press Release and identifies each affected issuer.RATINGS RATIONALEMenlo Park City School District's Aa1 issuer rating reflects district residents' exceptional wealth and incomes, the district's favorable San Francisco Bay Area location, and a strong financial position. The district's stable finances are supported by various board implemented reserve policies and from three evergreen parcel taxes and a fourth that expires in fiscal 2024. Somewhat offsetting its credit strengths, the district's leverage and fixed cost burdens are particularly elevated for the rating category.Newport-Mesa Unified School District's Aa1 issuer rating reflects district residents' very strong wealth and incomes, and a desirable coastal Orange County locale, consistent with its Community Funded status, which provides predictable and above-average higher per-student funding. The rating further reflects the district's healthy financial profile, following a draw on reserves for capital projects, given management's practice of limiting debt issuances to maintain an aggregate GO bond tax rate substantially lower than the statutory limit. Partially offsetting its credit strengths, the district's leverage and fixed cost burdens are somewhat elevated and fixed costs are likely to increase.Tamalpais Union High School District's Aa1 issuer rating reflects the district's exceptional resident wealth and income, benefiting from its location within the vibrant Bay Area and consistent with its Community Funded status, which provides predictable and above-average per-student funding. The district's leverage and fixed cost burdens are somewhat elevated relative to peers nationally but are similar to state peers. The rating positively reflects the district's strong management, which proactively addressed a structural deficit resulting from enrollment growth outpacing revenue increases. The district substantially cut expenditures in the last three years and recently extended an existing parcel tax, both of which will sustain its financial position in the near term.The new K-12 methodology is grounded in the assignment of an Issuer Rating reflecting each issuer's general ability to repay debt and debt-like obligations without consideration of any debt-specific pledge, security or structural feature. These assigned Issuer Ratings align with the definition for Issuer Rating detailed in Moody's Rating Symbols and Definitions, updated and published January 26, 2021.The analysis for the assignment of each Issuer Rating reflects an evaluation of the key elements of the credit analysis for K-12 school districts including the economy, finances, institutional framework and leverage together with other relevant considerations.These districts' Aa1 Issuer Ratings reflect their strong local economies and generally sound finances, while taking into consideration the potential challenges posed by their relatively high leverage and fixed cost ratios.Affirmation of these districts' Aaa general obligation (GO) bond ratings reflects both their strong general credit quality as well as the security features of the general obligation (GO) bonds. These districts' general obligation (GO) bond ratings are one notch higher than the Aa1 Issuer Ratings. The one notch distinction reflects California school district GO bond security features that include the physical separation through a "lockbox" for pledged property tax collections and a security interest created by statute.RATING OUTLOOKThe stable outlooks reflect our expectation that these districts will maintain healthy, stable credit quality, reflecting both prudent financial management and relatively strong community support. It also reflects their "community funded" status, which gives these districts a large measure of independence from state budget fluctuations.FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS- Material reduction of leverage and fixed cost burdenFACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS- Declines in fundamental credit factors, including those related to economy, finances, institutional framework, or leverageLEGAL SECURITYThe GOULT bonds are secured by the levy of ad valorem taxes, unlimited as to rate or amount, upon all taxable property within each district. The portion of the levy restricted for debt service is collected, held, and transferred directly to the paying agent by the counties in which each district is located on behalf of the district.METHODOLOGYThe principal methodology used in these ratings was US K-12 Public School Districts Methodology published in January 2021 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1202421. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.REGULATORY DISCLOSURESThe List of Affected Credit Ratings announced here are all solicited credit ratings. Additionally, the List of Affected Credit Ratings includes additional disclosures that vary with regard to some of the ratings. Please click on this link http://www.moodys.com/viewresearchdoc.aspx?docid=PBM_PBM907005458 for the List of Affected Credit Ratings. This list is an integral part of this Press Release and provides, for each of the credit ratings covered, Moody's disclosures on the following items:- Rating Solicitation- Issuer Participation- Participation: Access to Management- Participation: Access to Internal Documents- Disclosure to Rated Entity- EndorsementFor further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security 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 certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain 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.Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1243406.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.Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating. 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