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Thompson Public School District 61, ND -- Moody's assigns Aa2 ENH rating to Thompson Public School District 61, ND's GO bonds

·12 min read

Rating Action: Moody's assigns Aa2 ENH rating to Thompson Public School District 61, ND's GO bondsGlobal Credit Research - 29 Jan 2021New York, January 29, 2021 -- Moody's Investors Service has assigned a Aa2 enhanced rating to Thompson Public School District 61, ND's $4.4 million Limited Tax Building Fund Bonds, Series 2021.RATINGS RATIONALEThe Aa2 enhanced rating is based on the security provided by the State of North Dakota Department of Public Instruction's (NDDPI) school district credit enhancement program, as established by state statute. The program rating incorporates adequate program mechanics and the credit quality of the State of North Dakota, which has an issuer rating of Aa1 with a stable outlook. For more information on the state's rating and outlook, please see our most recent Rating Action report for the State of North Dakota dated October 8, 2020.Under the program, established and designed by the State of North Dakota, the bonds are secured by the state's pledge to accelerate state aid that has been appropriated to the district during the current fiscal year should the district be unable to meet debt service requirements. Pursuant to North Dakota code 6-09.4-23, the superintendent of the state Department of Public Instruction (DPI) will intercept aid due to a school district if notified of a potential debt service deficiency. To participate in the program, school districts must adopt a bond resolution and agree to provide a bond counsel opinion as well as file the debt service schedule with the DPI.School districts must also certify to an additional bonds test of two times maximum annual debt service (MADS) based on school aid available to the district. The district has completed all of the pre-sale requirements for participating in the program. Based on fiscal 2020-2021 state aid revenues of $5.6 million, the projected available state aid on an August 1 principal payment date is approximately 14.01x MADS of $399,549 which occurs in 2022. In addition, participation in the intercept program is irrevocable as long as the 2020 bonds are outstanding.RATING OUTLOOKThe programmatic rating carries the state's stable outlook.FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING- An upgrade in the state's issuer ratingFACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING- A downgrade in the state's issuer rating- Weakening of program mechanics, intercept timing or documentation- Significant decline in debt service coverage by pledged state aidLEGAL SECURITYThe 2021 bonds are limited obligations of the district payable solely the School Building Fund Levy, which may be levied upon all taxable property located in the District at the rate of 20.0 mills. The Bonds are additionally secured by the State of North Dakota Department of Public Instruction's (NDDPI) School District Credit Enhancement Program, which is rated Aa2 and carries a stable outlook.USE OF PROCEEDSThe proceeds of the bonds will finance school facility additions and improvements.PROFILEThompson Public School District 61 is located in eastern North Dakota, approximately 15 miles South of the City of Grand Forks (Aa2 stable). The district has an estimated population of 2,300 and an enrollment of 605.METHODOLOGYThe principal methodology used in this raitng was State Aid Intercept Programs and Financings published in December 2017 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1067422. 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. Maxwell Brekke 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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