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Waukee CSD Receives Rating from Moody’s Investors Service

New York, March 11, 2022 — Moody’s Investors Service has assigned an Aa2 to Waukee Community School District, IA’s $60 million General Obligation School Bonds, Series 2022A. Moody’s maintains an Aa2 issuer rating and Aa2 general obligation unlimited tax (GOULT) rating. The issuer rating reflects the district’s ability to repay debt and debt-like obligations without consideration of any pledge, security, or structural features. Following the sale, the district will have $282 million of GOULT bonds.

RATING RATIONALE

The Aa2 issuer rating reflects the district’s strong economic characteristics, including very strong property wealth and resident incomes, and rapid enrollment growth. The rate of enrollment growth slowed in the 2020-21 school year because of the coronavirus pandemic, but rapid growth resumed in the 2021-22 school year. Financial performance is adequate with satisfactory reserves. Long-term liabilities are elevated primarily because of an above-average debt burden that has financed new facilities to accommodate enrollment growth.

The Aa2 GOULT rating is equivalent to the Aa2 issuer rating based on the district’s pledge and statutory obligation to levy a dedicated property tax unlimited as to rate or amount.

RATING OUTLOOK

Moody’s typically does not assign outlooks to local governments with this amount of debt.

FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING

  • Moderation of long-term liabilities
  • Material growth in the district’s operating reserves

FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING

  • Substantial increases to leverage ratios beyond current expectations
  • Weakening of property wealth or resident incomes
  • Material deterioration of fund balance or liquidity

LEGAL SECURITY

Debt service on the district’s GOULT debt, including the Series 2022A bonds, is payable from a dedicated property tax levy that is unlimited as to rate or amount.

USE OF PROCEEDS

The Series 2022A bonds will finance construction and equipping of a new elementary building, a natatorium, land acquisition for new facilities, and various improvements at existing instructional facilities.

PROFILE

Waukee Community School District is located in the Des Moines (Aa2 stable) metropolitan area in Dallas County (Aaa stable) and has a growing population that is approaching 60,000. The district serves the cities of Waukee (Aa2), Clive (Aaa stable), Urbandale (Aa1), and West Des Moines (Aaa stable) as well as unincorporated portions of Dallas County and offers education for students in kindergarten through twelfth grade. Enrollment during the fall of 2021 was 12,616.

METHODOLOGY

The principal methodology used in this rating was US K-12 Public School Districts Methodology published in January 2021 and available here. 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 here.

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.

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