Moody's Assigns Aa2 Rating to New Rochelle School District Bonds; Outlook Changed to Negative

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NewImageNEW ROCHELLE, NY -- Moody's Investors Service has assigned a Aa2 rating to New Rochelle City School District's $2 million School District (Serial) Bonds, 2014.

Concurrently, Moody's has affirmed the Aa2 rating on the district's $60.2 million in outstanding long term parity debt. The outlook has changed to negative.

The bonds are secured by a unlimited General Obligation pledge. Proceeds will be used to permanently finance maturing Bond Anticipation Notes (BANs).

SUMMARY RATINGS RATIONALE

The Aa2 rating incorporates the school district's large tax base with strong residential wealth levels, ongoing tax appeals, a declining financial position and a low debt burden with manageable pension liability.

The negative outlook reflects the continued tax appeals and our belief that the district will be challenged to maintain adequate reserve levels over the near term.

STRENGTHS

-Large tax base with strong socioeconomic wealth indicators

-Low debt burden

CHALLENGES

-Ongoing tax appeals

-Declining financial position

-Reduced state aid

OUTLOOK

The negative outlook reflects the continued tax appeals and our belief that the district will be challenged to maintain adequate reserve levels over the near term.

What could make the rating change - UP

- Increased financial reserves

- Improvement in the tax base and/or demographic profile

What could make the rating change - DOWN

- Protracted structural budget imbalance

- Continued depletion of General Fund balance

- Continued tax appeals and/or deterioration of the district's tax base

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