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Ware County School District, GA -- Moody's assigns A1 UND / Aa1 ENH to Ware CSD, GA's general obligation sales tax bonds

·13 min read

Rating Action: Moody's assigns A1 UND / Aa1 ENH to Ware CSD, GA's general obligation sales tax bondsGlobal Credit Research - 30 Aug 2022New York, August 30, 2022 -- Moody's Investors Service has assigned A1 underlying and Aa1 enhanced ratings to Ware County School District, Georgia's $25.0 million General Obligation Sales Tax Bonds, Series 2022. Moody's maintains an A1 issuer rating on the district and its outstanding general obligation debt. The district will have approximately $26.9 million of general obligation debt outstanding following issuance of the Series 2022 bonds. The issuer rating reflects the district's ability to repay debt and debt-like obligations without consideration of any pledge, security, or structural features.RATINGS RATIONALEThe A1 issuer rating reflects the district's trend of balanced financial operations and growing reserves - both of which are indicative of prudent financial and budgetary management. These financial strengths, along with the district's low fixed costs, are balanced against its relatively high long-term liabilities, flat enrollment trends, and resident income and wealth metrics that are below sector medians.The A1 rating on the district's general obligation bonds is placed at the same level as the issuer rating because the bonds are general obligations of the district and are ultimately backed by an ad valorem property tax that is unlimited by rate or amount.The Aa1 enhanced rating is based on the additional security provided by the State of Georgia School District Intercept Program, under which the State Board of Education is required to transfer state aid appropriated for each school district directly to the paying agent in case of debt service shortfalls. Ware County School District meets the 1.0x debt service coverage requirement to obtain the programmatic rating. Estimated available state aid, based on fiscal 2021 state aid receipts, would provide over 8.0x coverage for the district's maximum debt service payment based on preliminary numbers.RATING OUTLOOKMoody's does not typically assign outlooks to K-12 school districts with this amount of debt.FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS- Moderation of pension burden that contributes to lower long-term liabilities- Sustained economic growth that improves resident income and wealth metricsFACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS- Trend of material declines in fund balance and/or liquidity- Increase in long-term liabilities and/or associated fixed costsLEGAL SECURITYThe bonds are general obligations of the district, ultimately payable from an ad valorem tax unlimited as to rate or amount to be levied, upon all taxable property within the school district subject to taxation for school bond purposes, including real and personal property, privately owned utilities, motor vehicles and mobile homes. The bonds are first backed, however, by a one percent sales and use tax collected within the school district. To the extent sales tax collections are insufficient to make such payments, debt service will become payable from the district's unlimited property tax.As additional security for the bonds, the district participates in the State of Georgia School District Intercept Program, under which the State Board of Education is required to transfer state aid appropriated for each school district directly to the paying agent in the event of debt service shortfalls.USE OF PROCEEDSProceeds from the bonds will partially fund various capital projects that include acquiring, constructing, and equipping a new middle school and open air multi-purpose facility at the existing high school.PROFILEThe district provides pre-kindergarten through twelfth grade education to approximately 6,000 students. The district operates 10 school buildings and employs approximately 1,000 staff.METHODOLOGYThe principal methodology used in the underlying rating was US K-12 Public School Districts Methodology published in January 2021 and available at https://ratings.moodys.com/api/rmc-documents/70054. The principal methodology used in the enhanced rating was State Aid Intercept Programs and Financings Methodology published in March 2022 and available at https://ratings.moodys.com/api/rmc-documents/356903. Alternatively, please see the Rating Methodologies page on https://ratings.moodys.com for a copy of these methodologies.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 on https://ratings.moodys.com/rating-definitions.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 issuer/deal page for the respective issuer on https://ratings.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://ratings.moodys.com/documents/PBC_1288235.Please see https://ratings.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 issuer/deal page on https://ratings.moodys.com for additional regulatory disclosures for each credit rating. Francis Mamo Lead Analyst REGIONAL_NE Moody's Investors Service, Inc. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Douglas Goldmacher Additional Contact REGIONAL_NE 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 © 2022 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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