Rating Action: Moody's assigns Aaa to Tamalpais UHSD, CA's 2021 GO Refunding Bonds; outlook is stable
New York, January 21, 2021 -- Moody's Investors Service has assigned a Aaa to Tamalpais Union High School District's $37.1 million in 2021 General Obligation Refunding Bonds (Federally Taxable). The district has $89.4 million in outstanding general obligation (GO) bonds, including the bonds being refunded with this offering, and of which $41.6 million is rated by Moody's. The outlook is stable.
The Aaa rating reflects the district's large and growing tax base, benefiting from unusually strong resident wealth and income measures and the district's location within the vibrant Bay Area economy. It further reflects the district's very low level of debt and moderate pension liability. The rating incorporates the strength of the district's financial operation, which benefits from the financial flexibility provided by entrenchment in community-funded status. The rating considers the district's strong management, which proactively addressed a developing structural deficit resulting from enrollment growth outpacing tax base growth. The district both secured ongoing revenue and cut expenditures, which will sustain its financial position in the near term.
We regard the coronavirus pandemic as a social risk under our ESG framework, given the substantial implications for public health and safety. However, we do not see any material immediate credit risks for the district, as its revenue stream is not reliant on state aid. The district has used federal and state coronavirus-related funding to cover costs related to the pandemic.
The outlook is stable based on our view that tax base growth will result in continued revenue increases and enrollment is expected to decline beginning in fiscal 2022. This combination will enable management to capitalize on prior expenditure reductions to maintain the district's financial position at a level consistent with both management's projections and with the rating.
- Material increase in balance sheet leverage from new debt or increased pension liability
The GO bonds are secured by the levy of ad valorem taxes, unlimited as to rate or amount, upon all taxable property within the district. The portion of the levy restricted for debt service is collected, held, and transferred directly to the paying agent by Marin County (Aaa stable) on behalf of the district.
USE OF PROCEEDS
The proceeds of the 2021 GO refunding bonds will be used to refund a portion of the district's 2014 GO Refunding Bonds and the remaining outstanding 2011 GO refunding bonds.
PROFILE
Tamalpais Union High School District is located in Marin County, approximately five miles north of San Francisco (Aaa negative) with an estimated population of 116,634 in the communities of Belvedere, Bolinas, Corte Madera, Fairfax, Greenbrae, Kentfield, Lagunitas, Larkspur, Marin City, Mill Valley, Nicasio, Ross, San Anselmo, San Geronimo, Sausalito, Stinson Beach, Tiburon and Woodacre. The district overlaps with ten feeder elementary school districts. The district operates three comprehensive high schools and three alternative schools, with an enrollment of 5,165 for fiscal 2021.
METHODOLOGY
The principal methodology used in this rating was US Local Government General Obligation Debt published in July 2020 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1230443. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.
REGULATORY DISCLOSURES
For 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.
Lori Trevino Lead Analyst Regional PFG West Moody's Investors Service, Inc. 405 Howard Street Suite 300 San Francisco 94105 US JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 William Oh Additional Contact Regional PFG West JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Releasing Office: Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653
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