Rating Action: Moody's assigns initial Aa2 to Valley Stream UFSD 13, NY's $31.8M Ser. 2020 GOULT Bonds
Global Credit Research - 17 Aug 2020
New York, August 17, 2020 -- Moody's Investors Service has assigned an initial Aa2 rating to Valley Stream Union Free School District 13, NY's $31.785 million School District Serial Bonds - 2020.
RATINGS RATIONALE
The Aa2 rating reflects the moderately sized tax base on Long Island with average wealth levels for the area, strong finances, and average debt and pension burden. Governance is a driver of this action given that this is an initial rating. Management's ability to manage revenues and expenditures is reflected in the institutional framework score of "Aa".
We regard the coronavirus outbreak as a social risk under our ESG framework, given the substantial implications for public health and safety. The coronavirus crisis is not a key driver for this rating action. We do not see any material immediate credit risks for Valley Stream UFSD 13. However, the situation surrounding coronavirus is rapidly evolving and the longer term impact will depend on both the severity and duration of the crisis. If our view of the credit quality of the district changes, we will update the rating and/or outlook at that time.
RATING OUTLOOK
Outlooks are not typically assigned to issuers with this amount of debt outstanding.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING
- Improved fund and cash balances
- Significant tax base growth
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING
- Erosion of reserves
- Material tax base contraction
LEGAL SECURITY
The bonds are secured by the district's general obligation unlimited tax pledge. The bonds are further secured by the State of New York's commitment to advance available state aid to pay debt service pursuant to the state's Section 99-b intercept program.
USE OF PROCEEDS
Proceeds will refund $30 million in outstanding bond anticipation notes which are due September 4, 2020. Additional proceeds will be used for various district projects.
PROFILE
Valley Stream UFSD 13 provides elementary education (K-6) to approximately 2,100 students in Valley Stream (Ba1 Negative), NY.
METHODOLOGY
The principal methodology used in this rating was US Local Government General Obligation Debt published in July 2020 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1230443. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.
REGULATORY DISCLOSURES
For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.
For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.
Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.
Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1133569.
At least one ESG consideration was material to the credit rating action(s) announced and described above.
Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.
Valentina Gomez Lead Analyst Regional PFG Northeast Moody's Investors Service, Inc. 7 World Trade Center 250 Greenwich Street New York 10007 US JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Robert Weber Additional Contact Regional PFG Northeast JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Releasing Office: Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653
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