Facts, Not Fear: KBRA’s Ratings on California School District GO Bonds
KBRA’s ratings of California School District general obligation (GO) bonds continue to reflect the statutory framework established by Assembly Bill 1200 (A.B. 1200) and its amendments, which provide fiscal oversight and monitoring requirements for California school districts and the explicit legal protections for bondholders with respect to the pledged ad valorem property taxes supporting school district debt. As KBRA has noted previously,1 and as our updated review of the legal and regulatory environment in California demonstrates, we expect the validity and resilience of these credit strengths to remain fully in place irrespective of the underlying financial condition of the school district.
Key Takeaways
The property-tax levy collected for the payment of GO bonds is deposited in special accounts held by the county treasurer and must be used solely for the payment of debt service on each series of bonds and may not be diverted,…
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