Rating Action: Moody’s assigns negative outlook to Tucson USD No 1, AZ’s bonds; affirms Aa2
On July 30, 2015, Moody’s Investors Service announced that it “has affirmed the Aa2 rating on Tucson Unified School District No. 1 (Pima County), Arizona’s general obligation bonds. Concurrently, we have assigned a negative outlook.”
The Aa2 affirmation reflects the district’s large, diverse tax base and improving economic prospects in and around the City of Tucson, relatively narrow financial position with expected stable performance at year-end 2015, and below average debt profile with additional borrowing plans.”
OUTLOOK
The negative outlook reflects the expectation the district’s ability to replenish reserves will remain challenged due to pressures from declining enrollment and state aid.
WHAT COULD MAKE THE RATING GO UP (remove negative outlook)
• Stable or improving performance in fiscal 2015 and fiscal 2016
• Stabilized enrollment trend
• Strengthening of residential income profile
WHAT COULD MAKE THE RATING GO DOWN
• Negative deviation from expectations in fiscal 2015
• Material tax base contraction
OBLIGOR PROFILE
The district provides pre-K through 12th grade education to around 46,000 students. The district also includes magnet/theme schools and technological, adaptive, bilingual and other alternative programs and services. The Governing Board consists of five members each of whom is elected for four year terms on a staggered basis.
LEGAL SECURITY
The bonds are secured by the district’s unlimited property tax pledge.