East Penn School District, PA -- Moody's Assigns Aa2 Rating to East Penn School District's (PA) $8.1M General Obligation Bonds, Series of 2013
New York, December 06, 2012 --
Issue: General Obligation Bonds, Series of 2013; Rating: Aa2; Sale Amount: $8,085,000; Expected Sale Date: 12/20/2012; Rating Description: General Obligation
Moody's Investors Service has assigned a Aa2 rating to East Penn School District's (PA) $8.1 million General Obligation Bonds, Series of 2013. The bonds are secured by the district's general obligation, limited tax pledge as they are not exempt from the limits of Special Sessions Act 1. The bonds will refund $2.475 million Series of 2007 bonds and $5.375 million Series of 2008 bonds for present value savings of approximately $251,000 or 3.2%.
SUMMARY RATING RATIONALE
The Aa2 rating reflects the district's historically strong financial operations, resulting in satisfactory reserve levels; a large suburban Allentown area community with wealth levels that exceed state and national medians; and an average debt profile that is expected to remain affordable as future capital and borrowing plans are minimal.
- Conservative financial management practices which have resulted in a history of satisfactory reserve levels
- Underlying economy is stable, reflective of its above-average wealth levels and a diversified tax base
- Maintenance of financial flexibility given a volatile revenue environment and limited revenue raising abilities
-Above average unemployment compared to the state
WHAT COULD MAKE THE RATING GO UP:
- Substantial improvement in the district's financial reserves.
- Significant growth in the district's underlying tax base.
WHAT COULD MAKE THE RATING GO DOWN:
- Inability to maintain satisfactory financial flexibility
- Deterioration in the district's underlying economy and tax base
The principal methodology used in this rating was General Obligation Bonds Issued by U.S. Local Governments published in October 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.
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Valentina A Gomez Associate Analyst Public Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Christopher Coviello Vice President - Senior Analyst Public Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.
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