Tuesday, December 2, 2014

Moody's Upgrade

Moody’s Investors Service Upgrades Clarkston Community Schools Bond Ratings

CLARKSTON, Mich.— Clarkston Community Schools today announced it that Moody’s Investors
Service upgraded the district’s $19.9 Million 2015 Refunding Bonds (General Obligation –
Unlimited Tax) to an A1 underlying rating and Aa2 enhanced rating. An A1 underlying rating on
the district’s outstanding general obligation (GO) debt was reaffirmed, and Moody’s removed
its “negative outlook.”

Moody’s noted multiple strengths leading to the assigned rating, including recent improvement
to the district’s financial operations resulting from significant expenditure reductions, above
average socioeconomic indicators and a sizable recovering tax base.

“Moody’s upgrade to Clarkston Community Schools’ rating reflects the health of our district and
the hard work that has gone into keeping the schools financially sound even in a continually
challenging environment for education,” said Rod Rock, Ed.D., superintendent of Clarkston
Community Schools. “With a high rating, we are better equipped to borrow at better rates to
maintain our vigorous standards for student learning. Our rating proves we are a good
investment for bond buyers, as well as parents and students.”

Moody’s summarized its ratings rationale in its report:
The A1 underlying rating reflects the district's sizable tax base and affluent demographic
profile; limited reserves; maintenance of some revenue and expenditure flexibility
despite the sectors weak institutional framework; and elevated debt burden. Removal
of the negative outlook is based on recent improvement to the district's financial
operations that is expected to stabilize the district's reserves. Also incorporated is
recent recovery in the tax base, that will likely reduce the district's debt burden going
forward despite ongoing borrowing from the state School Bond Loan Revolving Fund
(SLRF) to support debt service.

The Aa2 enhanced rating is based on the SBQLP [School Bond Qualification and Long
Program] programmatic rating of Aa2, which reflects sound program mechanics and the
strength of the state's GO credit.

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