Posted Date: 08/17/2016
Moody’s Investors Service recently upgraded USD 385’s bond rating to Aa3 from A1. The change reflects a higher credit quality and a lower level of credit risk. It also shows the district’s improvement in liquidity and reserves. The report, released on Aug. 11, sites the district’s “strong socioeconomic indices, slightly elevated debt burden with rapid principal amortization,” stable and increasing tax base, and nearness to Wichita as reasons for the upgrade.
The purpose of the rating is to apply an established system to gauge credit quality. There are nine symbols used to group bonds, preferred stocks or government entities, ranging from least credit risk to greatest credit risk: Aaa, Aa, A, Baa, Ba, B, Caa, Ca and C. (Investopedia says "C ratings are usually given to securities that are in default with little chance of the principal being repaid.") Moody’s also denotes either a 1, 2 or 3 to modify within the groups. Visit Moody’s website to get a more in-depth explanation of credit ratings.