Kroll Bond Rating Agency Assigns Long-Term AA+ Rating to Los Angeles Unified School, CA’s 2016 GO Bonds

NEW YORK--()--Kroll Bond Rating Agency (KBRA) has assigned an initial long-term AA+ rating and Stable Outlook to the Los Angeles Unified School District, CA’s (“LAUSD” or “District”) General Obligation Bonds, Election of 2008, Series A (2016) (Dedicated Unlimited Ad Valorem Property Tax Bonds) (“2016 New Money Bonds”) and 2016 General Obligation Refunding Bonds, Series A (Dedicated Unlimited Ad Valorem Property Tax Bonds) (“2016 Refunding Bonds”, and together with the 2016 New Money Bonds, the “2016 Bonds”). The 2016 Bonds will be issued by the County of Los Angeles (“County”) on behalf of the District. KBRA does not rate the District’s other outstanding bonds. Preliminary estimates for the par amount of the 2016 New Money Bonds and 2016 Refunding Bonds are $650 million and $575 million, respectively. The 2016 Bonds will be issued as fixed rate bonds and are expected to be priced on or about March 1, 2016 and close on or about April 5, 2016.

This rating assignment is based on KBRA’s U.S. Local Government General Obligation Rating Methodology, published on May 31, 2012.

In addition to an evaluation of the four key rating determinants identified in KBRA’s methodology, the initial AA+ long-term rating also reflects KBRA’s understanding that the property taxes that secure the 2016 Bonds would likely be treated as “special revenues” as defined under the U.S. Bankruptcy Code (“Code”) in a Chapter 9 proceeding. KBRA view this as an additive factor.

The 2016 Bonds are secured and payable from ad valorem taxes assessed on all taxable property within the District, which the County is statutorily obligated to levy without limitation as to rate or amount in an amount sufficient to pay debt service. These revenues may be used solely for the payment of debt service on the 2016 Bonds and may not be used for any other purpose, including general operations of the District.

The full report for LAUSD can be found at the following link: https://www.krollbondratings.com/show_report/3705.

About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).

Contacts

Analytical Contacts:
Kroll Bond Rating Agency
Jenny Maloney, 646-731-2464
Director
jmaloney@kbra.com
or
Alice Cheng, 646-731-2403
Associate Director
acheng@kbra.com
or
Kate Hackett, 646-731-2304
Managing Director
khackett@kbra.com
or
Karen Daly, 646-731-2347
Senior Managing Director
kdaly@kbra.com

Contacts

Analytical Contacts:
Kroll Bond Rating Agency
Jenny Maloney, 646-731-2464
Director
jmaloney@kbra.com
or
Alice Cheng, 646-731-2403
Associate Director
acheng@kbra.com
or
Kate Hackett, 646-731-2304
Managing Director
khackett@kbra.com
or
Karen Daly, 646-731-2347
Senior Managing Director
kdaly@kbra.com