Bond Ratings Lowered for Some Gulf Coast School Districts

The creditworthiness of several school districts in Louisiana and Mississippi has taken a hit in the aftermath of the devastation caused last August by Hurricane Katrina, according to a recent report by Moody’s Investor Service.

Downgrades in the credit ratings that the New York City-based rating firm assigned to districts and other government agencies in the Gulf Coast region had been expected because of Katrina’s disruption of sales- and property-tax revenues and the uncertain outlook for recovery.

The ratings are the analysts’ opinions about the ability of bond issuers to repay the debt. Lower credit ratings result in higher interest rates, and thus increase the cost to districts of issuing bonds to build and repair schools. ( "Bond Ratings Another Worry for Gulf Coast Districts," ...