Leavenworth County U.S.D. 469 (Lansing), KS — Moody’s downgrades Leavenworth County USD 469 (Lansing), KS’s GO to A3 & assigns A3 issuer rating
Rating Action: Moody’s downgrades Leavenworth County USD 469 (Lansing), KS’s GO to A3 & assigns A3 issuer ratingGlobal Credit Research – 16 Mar 2021New York, March 16, 2021 — Moody’s Investors Service has assigned an A3 issuer rating to Leavenworth County Unified School District 469 (Lansing), Kansas. The issuer rating reflects the district’s ability to repay debt and debt-like obligations without consideration of any pledge, security or structural features. Concurrently, Moody’s has downgraded the underlying rating on the district’s general obligation unlimited tax (GOULT) bonds to A3 from A1. This action concludes a review for possible downgrade initiated on January 26, 2021 in conjunction with the release of the US K-12 Public School Districts methodology. The district has $89.9 million of rated GOULT bonds.RATINGS RATIONALEThe A3 issuer rating incorporates the district’s above average resident income, weak full value per capita and stable enrollment (through fiscal 2020). The rating further incorporates cash balances that are much weaker than the state and national medians, and the district’s revenue raising flexibility is very narrow. Finally, the rating reflects elevated leverage ratios and weak financial reporting because the cash-based audit does not disclose a modified accrual-based fund balance, other post-employment liability, capital asset values or depreciation.The rating assigned to the district’s general obligation bonds was downgraded two notches because it is equivalent to the A3 issuer rating, based on the district’s general obligation full faith and credit pledge as well as an unlimited property tax dedicated to debt service.RATING OUTLOOKMoody’s does not usually assign outlooks to local government credits with this amount of debt.FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS- Material increases in cash- Strengthening of the full value per capita- Material declines in leverage and fixed costs- Strengthening of financial reporting that does not uncover additional credit weaknessesFACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS- Weakening cash in the operating funds- Erosion of economic indicators or weakening enrollment trend- Increase in long-term liabilities or fixed costsLEGAL SECURITYThe district’s GOULT debt is a general obligation of the district payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all taxable tangible property, real and personal, within the territorial limits of the district.PROFILEThe district is in the City of Lansing (A1) located approximately 30 miles northwest of Kansas City, MO (Aa3 stable). The district operates five schools and current enrollment is approximately 2,600.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 DISCLOSURESFor 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. Heather Guss Lead Analyst Regional PFG Dallas Moody’s Investors Service, Inc. 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