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Great Oaks Career Campuses, OH -- Moody's assigns Aa1 rating to Great Oaks Career Campuses, OH's COPs and affirms the Aaa issuer rating; outlook is stable

·12 min read

Rating Action: Moody's assigns Aa1 rating to Great Oaks Career Campuses, OH's COPs and affirms the Aaa issuer rating; outlook is stableGlobal Credit Research - 12 Feb 2021New York, February 12, 2021 -- Moody's Investors Service has assigned a Aa1 rating to Great Oaks Career Campuses, OH's $38 million Certificates of Participation, Series 2021 (School Improvement Project). Concurrently, we have affirmed the vocational school district's Aaa issuer rating, as well as the Aa1 rating assigned to previously issued certificates of participation (COPs). The outlook is stable. Following the sale of the current offering the district will have a total of $81.9 million in outstanding rated debt secured by its pledge to make annual lease payments, subject to annual appropriation.RATINGS RATIONALEThe Aaa issuer rating, which is based on the district's general credit quality and ability to repay debt and debt-like obligations, reflects the district's very large footprint that spans portions of 12 counties in southwest Ohio (Aa1 stable), which provides for a broad tax base to support district operations and access to deep pool of potential students. Also factored are the district's strong operating history and robust fund balance and liquidity, that we expect will be sustained by management's conservative budgeting practices, along with the district's enhanced operating flexibility as compared to traditional K-12 school districts. The rating also incorporates the district's debt and pension burdens that are modest relative to full value, but moderately higher relative to the size of annual operations.The Aa1 rating on the district's lease revenue bonds is one notch below the issuer rating, reflecting the contingent nature of the pledge, which is subject to annual appropriation, and the more essential financed projects. All of the district's actively managed general revenue is available for appropriation.RATING OUTLOOKThe stable outlook reflects our expectation that the district's credit profile will remain strong, given the district's financial flexibility and combined with management's track record of maintaining ample reserves. Furthermore, the district's sizable tax base and low tax burden will continue to strengthen the credit profile.FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS-Not applicableFACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS-Sustained declines in student enrollment-Material narrowing of operating fund balance and liquidity-Significant increases to the district's long-term liability leverageLEGAL SECURITYThe district's lease revenue debt, including the Series 2021 COPs, are secured by its pledge to make annual lease payments to a trustee pursuant to the Lease-Purchase Agreement. Lease payments are subject to annual appropriation by the district's Board of Education.USE OF PROCEEDSProceeds from the Series 2021 COPs will be used to finance comprehensive capital projects at the district's Live Oaks Career Center campus.PROFILEThe Great Oaks Career Campuses covers 12 counties and 36 school districts in southwest Ohio. Established in 1968, the district provides career and technical education to high school juniors and seniors at its four career centers, as well as younger students through its satellite programs at participating member districts. The district is governed a 35 member Board of Education, and had a full-time equivalent enrollment of approximately 3,800 students for its fiscal 2020 school year.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. Andrew Van Dyck Dobos Lead Analyst Regional PFG Chicago Moody's Investors Service, Inc. 100 N Riverside Plaza Suite 2220 Chicago 60606 US JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Eric Harper Additional Contact Regional PFG Chicago 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 © 2021 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.CREDIT RATINGS ISSUED BY MOODY'S CREDIT RATINGS AFFILIATES ARE THEIR CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY’S (COLLECTIVELY, “PUBLICATIONS”) MAY INCLUDE SUCH CURRENT OPINIONS. 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