Sausalito Marin City School District, CA 'AA+' And 'AA' Bond Ratings Reinstated

CENTENNIAL (S&P Global Ratings) April 15, 2019--S&P Global Ratings reinstated its 'AA+' long-term rating and 'AA' appropriation rating on Sausalito Marin City School District, Calif.'s existing bonds. The outlook is stable.
"The stable outlook reflects our view that the district will make the necessary expenditure reductions that will result in positive general fund operations beginning in 2020," said S&P Global Ratings credit analyst Angel Bacio.
The GO bonds are secured by revenue from unlimited-ad valorem taxes levied on taxable property within the district. The Marin County Board of Supervisors has the power and obligation to levy these taxes at the district's request to repay the bonds. The county is required to deposit such taxes, when collected, into the bonds' debt service fund.
The certificates of participation represent an interest in lease payments made by the district, as lessee, to Sausalito School District., as lessor, for the use and possession of the leased asset, Bayside Martin Luther King Jr. Academy Elementary School. We rate this obligation one notch lower than the district's general creditworthiness to account for the appropriation risk associated with the lease payments. The district has pledged its best efforts to seek appropriations annually out of its operating budget, and has considered the affordability of the lease payments in its long-term plans. Under the lease agreement, the district can abate lease payments in the event the leased asset is damaged or destroyed. In addition, we evaluated the seismic risk of the leased asset pursuant to our criteria and estimated that the leased asset does not have a greater than 5% probability of incurring 25% damage during the life of the bonds.
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