Sign in Subscribe
Economic growth

Moody's Assigns Aa3 Rating to El Monte Union High School District's General Obligation Bonds

Strategic Insights

— 1 min read

The El Monte Union High School District, located in the eastern portion of Los Angeles County, has issued $45 million in general obligation bonds, Series D, to fund various capital projects, including the construction of a new high school and the renovation of existing facilities. Moody's Investors Service has assigned an Aa3 rating to these bonds, reflecting the district's strong financial position and growth potential. The district's solid property wealth levels and steady tax base are expected to continue improving, despite budgetary pressures due to declining enrollment and projected spend down of one-time funds.

Key Takeaways:

  • Moody's assigned an Aa3 rating to El Monte Union High School District's general obligation bonds, Series D, with a proposed par amount of $45 million.
  • The district has a stable financial position, with a solid property wealth level and a steady tax base, although budgetary pressures are expected due to declining enrollment.
  • The district's fiscal position will remain sound, despite budgetary pressures, with an available fund balance of 35.5% and liquidity of 51.5% of operating revenue.
  • The rating also considers the district's elevated long-term liabilities and fixed costs ratio of 360% and 19% of revenue, respectively, which will remain manageable given the modest debt issuance plans over the next few years.
  • The Aa3 rating on the GO bonds is one notch higher than the district's issuer rating, reflecting California school district GO bond security features that include physical separation through a "lockbox" for pledged property tax collections and a security interest created by statute.
  • Moody's maintains an A1 issuer rating and Aa3 ratings on the district's outstanding general obligation unlimited tax (GOULT) bonds.
  • The outlook is stable, reflecting our expectation that the district will continue to maintain its solid and stable financial position despite budgetary pressures.

Statistics:

  • Total debt outstanding: approximately $350 million.
  • Assessed value: $20.4 billion.
  • Full value per capita: $123,000.
  • Median household income (MHI): 77.4% of the US MHI.
  • Enrollment: declining at a rate of 3.5% CAGR.
  • Available fund balance and liquidity: 35.5% and 51.5% of operating revenue, respectively.
  • Long-term liabilities and fixed costs ratio: 360% and 19% of revenue, respectively.

Sources:

  • Moody's Ratings (Moody's)
  • US K-12 Public School Districts methodology (available at [https://ratings.moodys.com/rmc-documents/425431](https://ratings.moodys.com/rmc-documents/425431))
  • Rating Methodologies page on [https://ratings.moodys.com](https://ratings.moodys.com)

Read more