Moody's Assigns Aa3 Rating to North Clackamas School District's General Obligation Refunding Bonds

Strategic Insights -

The North Clackamas School District in Oregon has recently issued a general obligation refunding bond, Series 2025 (Federally Taxable), with an expected amount of approximately $14.3 million. Moody's Investors Service has assigned a Aa3 underlying rating to the bonds, based on the district's strong and expanding local economy, sound financial position, and modestly growing enrollment. The rating also reflects the district's commitment to conservative management and the availability of operating fund balance. The outlook for the issuer and underlying ratings is stable.

Key Takeaways:

  • The Aa3 issuer rating reflects the district's strong and expanding Portland metro area local economy, with growing enrollment and a high real market value per capita.
  • The district's sound financial position is supported by available operating fund balance equal to 26.0% of revenue in fiscal 2024 and conservative management.
  • The district's GOULT bond rating is equivalent to the Aa3 issuer rating, based on the district's general obligation full faith and credit pledge and unlimited property tax dedicated to debt service.
  • The Aa1 enhanced rating of the Oregon School Bond Guaranty Program reflects the State of Oregon's full faith and credit and unlimited taxing power, pledged to guarantee qualified bond debt service for school districts when due.
  • Key aspects of the Oregon School Bond Guaranty Program include third party notification of any unpaid debt service and favorable state oversight.
  • The stable outlook reflects our expectation that reserves will remain at sound levels incorporating planned spenddown, supported by capable management and modestly growing enrollment.
  • The district operates 18 elementary schools, four middle schools, four high schools, one alternative high school, one professional technical center, and four charter schools, with enrollment of roughly 17,000 as of fiscal 2025.

Statistics:

  • $14.3 million: expected amount of the general obligation refunding bond, Series 2025 (Federally Taxable).
  • Aa3: underlying rating assigned to the bonds.
  • Aa1: enhanced rating assigned to the Oregon School Bond Guaranty Program.
  • 26.0%: available operating fund balance as a percentage of revenue in fiscal 2024.
  • 325%: long-term liabilities as a percentage of revenue.
  • 18: number of elementary schools.
  • 4: number of middle schools.
  • 4: number of high schools.
  • 1: number of alternative high schools.
  • 1: number of professional technical centers.
  • 4: number of charter schools.
  • 17,000: enrollment as of fiscal 2025.

Sources:

  • Moody's Investors Service
  • US K-12 Public School Districts methodology, published in July 2024
  • Guarantees, Letters of Credit and Other Forms of Credit Substitution Methodology, published in July 2022
  • https://ratings.moodys.com/rmc-documents/425431
  • https://ratings.moodys.com/rmc-documents/386295
  • https://ratings.moodys.com
  • https://ratings.moodys.com/RatingMethodologies