RTSD Credit Rating Information
The Radnor Township School District has recently been assigned a Aaa rating from Moody’s Investors Service. This is an upgrade from the District’s Aa1 rating and reflects the relative wealth of the Radnor community along with our excellent financial position. Only nine school districts in Pennsylvania currently have a Aaa rating from Moody’s.
Moody's Assigns Aaa GOULT to RTSD Series of 2023 Bonds
Moody's Investors Service has assigned a Aaa general obligation unlimited tax (GOULT) rating to Radnor Township School District, PA’s $7.3 million General Obligation Bonds, Series of 2023. Concurrently, Moody’s has upgraded the district’s issuer, GOULT and general obligation limited tax (GOLT) ratings to Aaa from Aa1. The issuer rating represents the district’s ability to repay debt and debt-like obligations without consideration of any pledge, security, or structural features. Post- issuance, the district will have $98.9 million in debt outstanding. The outlook is stable.
RATINGS RATIONALE
The district's Aaa issuer rating reflects its robust resident wealth and income levels, along with its excellent and improving financial position. The rating also captures the district’s moderate- but-manageable leverage. The district’s credit quality benefits from its ongoing willingness to increase its property tax levy, along with its additional reserves held outside of its General Fund.
The lack of distinction between the district's issuer rating and the Aaa rating on the district's GOULT and GOLT debt is based on the district's general obligation full faith and credit pledge. The GOLT rating also reflects Pennsylvania school districts' ability to apply for exceptions to the cap on property tax increases in order to cover debt service and the Commonwealth's history of granting such exceptions.
RATING OUTLOOK
The stable outlook reflects the district's consistently excellent financial position, alongside its robust economic and social indicators.
FACTORS THAT COULD LEAD TO A DOWNGRADE
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Material additional borrowing that leads to outsized leverage relative to revenue
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Significant draws on reserves and liquidity
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Deterioration of existing resident wealth or income levels
LEGAL SECURITY
The Series of 2023 bonds are backed by the district's general obligation unlimited tax (GOULT) pledge, as the bonds will be used to refund debt that was initially incurred prior to the 2006 implementation of Pennsylvania's Act 1 index. The district's Series B of 2015, Series A of 2019, and Series B of 2019 are similarly backed by its GOULT pledge.
The remainder of the district's outstanding debt is backed by its general obligation limited tax (GOLT) pledge, which is subject to the limitations of Pennsylvania's Act 1 index.
USE OF PROCEEDS
Proceeds from the sale of the Series of 2023 bonds will be used to refund the district’s Series A of 2015 bonds for savings.
