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Moody's Investors Service Inc.

Moody's Assigns Aa1 Rating to Indian Prairie District 204's General Obligation Bonds

Strategic Insights

— 2 min read

Indian Prairie Community Unit School District 204 in Illinois has secured a Aa1 rating from Moody's Investors Service for its General Obligation School Building Bonds, Series 2025. The decision reflects the district's strong local economy, stable enrollment, and sound reserves. With a debt outstanding of approximately $208.3 million post-issuance, the district has a relatively low leverage and fixed costs. The Aa1 issuer rating from Moody's is equivalent to the Aa1 GOULT rating, which is based on the district's full faith and credit pledge.

Key Takeaways:

  • The Aa1 rating reflects the district's strong local economy, with a resident income ratio of 170% and a full value per capita of $152,000.
  • The district has a stable enrollment, with an average trend of negative 0.3% over the past three years, but has begun to stabilize and remain at current levels.
  • The district's available fund balance ratio is sound at 31%, with a net cash ratio of 42%.
  • The district expects to end fiscal 2025 with balanced operations, with similar budgetary expectations for fiscal 2026.
  • The district is considering transferring approximately $12 million of educational fund balance to the capital projects fund in fiscal 2026.
  • Leverage, inclusive of the upcoming issuance, is low at 60%, but will increase as the remaining $255 million of voter-approved debt is issued, potentially reaching up to 105% of revenue.
  • Fixed costs are projected to increase to approximately 4% of revenue.
  • The Aa1 GOULT rating is equivalent to the Aa1 issuer rating based on the district's full faith and credit pledge.
  • Moody's does not assign outlooks to local governments with this amount of debt.
  • Expansion of the local economy, maintenance of reserves at or above 45% of revenue, and improved enrollment trend could lead to an upgrade of the rating.
  • Erosion of the local economy, degradation of reserves to levels at or below 20% of revenue, and an increase in leverage beyond current estimates could lead to a downgrade of the rating.

Statistics:

  • Resident income ratio: 170%
  • Full value per capita: $152,000
  • Available fund balance ratio: 31%
  • Net cash ratio: 42%
  • Debt outstanding (post-issuance): $208.3 million
  • Leverage (inclusive of upcoming issuance): 60%
  • Leverage (potentially): up to 105% of revenue
  • Fixed costs ratio: approximately 4% of revenue
  • District enrollment: exceeds 26,000 students

Sources:

  • Moody's Ratings (Moody's) - "DuPage and Will Counties Community Unit School District 204 (Indian Prairie), IL: Moody's Assigns Aa1 to General Obligation School Building Bonds, Series 2025"
  • US K-12 Public School Districts methodology published in July 2024
  • Moody's Rating Methodologies page on https://ratings.moodys.com

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