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Scott County Unified School District 466 (Scott City), KS -- Moody's assigns A2 to Scott County USD 466 (Scott City), KS' GOULT bonds; assigns A2 issuer rating

·12 min read

Rating Action: Moody's assigns A2 to Scott County USD 466 (Scott City), KS' GOULT bonds; assigns A2 issuer ratingGlobal Credit Research - 17 Feb 2021New York, February 17, 2021 -- Moody's Investors Service has assigned an A2 rating to Scott County Unified School District 466 (Scott City), KS' $18.3 million Taxable General Obligation Refunding Bonds, Series 2021. At the same time, Moody's assigned an A2 issuer rating and affirmed the A2 rating on $9.9 million of the district's rated outstanding general obligation unlimited tax (GOULT) bonds.RATINGS RATIONALEThe A2 issuer rating, which reflects the district's general credit quality and ability to repay debt and debt-like obligations, incorporates strong cash balances that help to offset the district's very limited revenue raising flexibility. The rating also incorporates a stable economy with above average resident income and increasing enrollment. The district's moderate fixed costs ratio and leverage are driven entirely by debt given state supported pension obligations. Finally, the rating also considers the district's weak financial reporting. The cash-based audit does not comply with US Generally Accepted Accounting Principles (GAAP) and does not disclose a modified accrual-based fund balance, retiree healthcare liabilities, capital asset values or depreciation.The district's general obligation unlimited tax bonds rating is equivalent to the A2 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- Strengthening of financial reporting that does not uncover additional credit weaknesses- Decrease in long-term liabilities or fixed-costs ratioFACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS- Material decline in cash- Increase in long-term liabilities or fixed-costs ratioLEGAL 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.USE OF PROCEEDSThe Series 2021 bonds will advance refund a portion of the outstanding Series 2017-A bonds for net present value savings with no extension of final maturity.PROFILEUSD 466 is located approximately 33 miles north of Garden City and 240 miles west of Wichita. The district primarily serves Scott City and various unincorporated portions of Scott, Lane, Logan and Wichita Counties. The district's service area encompasses approximately 756 square miles and has a current population of 4,900 residents. Current enrollment is approximately 1,000 students.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. Catherine Nicolosi Lead Analyst Regional PFG Dallas Moody's Investors Service, Inc. Plaza Of The Americas 600 North Pearl St. Suite 2165 Dallas 75201 US JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Eva Bogaty 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 © 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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