Credit rating agency has positive outlook on Decatur school construction bondCity Schools of Decatur Administrative Offices. Photo by Dena Mellick
Moody’s Investors Service has given a positive credit rating to a $75 million general obligation bond that will pay for City Schools of Decatur construction projects.
On Nov. 3, voters overwhelmingly approved a plan to borrow $75 million for school construction. Currently the school system has about 4,300 students, but will have over 6,000 by 2020. The $75 million to-do list for CSD includes $15 million for a new elementary school.
Moody’s has given the bond a rating of AA1 and given an AA2 underlying rating. Both ratings indicate that Moody’s considers Decatur’s GO bond to be a high quality investment with low risk. According to Moody’s, “An underlying rating is Moody’s assessment of a particular obligation’s credit quality absent any insurance or wrap from a financial guarantor or other credit enhancement.”
“The Aa2 underlying rating reflects the city’s sizable tax base that benefits from institutional presence and strong demographics, healthy reserve position and an above-average debt burden due to the issuances of school system debt,” the report from Moody’s says. “The Aa1 enhanced rating reflects the strong debt service coverage provided on school system debt by state aid revenues.”