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U.S. PUBLIC FINANCE
JANUARY 26, 2021

RATING US K-12 Public School Districts Methodology
METHODOLOGY

Introduction
Table of Contents:
INTRODUCTION 1
SCOPE OF THIS METHODOLOGY 2 In this rating methodology, we explain our general approach to assessing credit risk for US public
SECTOR OVERVIEW 2 school districts that provide education or educational services, typically from pre-kindergarten or
SCORECARD FRAMEWORK 3 kindergarten through 12th grade (K–12), including the qualitative and quantitative factors that
DISCUSSION OF THE SCORECARD FACTORS 4 are likely to affect rating outcomes in this sector.
FACTOR: LEVERAGE (30% WEIGHT) 10
NOTCHING FACTORS 13 We discuss the scorecard used for this sector. The scorecard is a relatively simple reference tool
1
OTHER CONSIDERATIONS 17
ASSIGNING ISSUER-LEVEL AND that can be used in most cases to approximate credit profiles in this sector and to explain, in
INSTRUMENT-LEVEL RATINGS 21 summary form, many of the factors that are generally most important in assigning issuer-level
KEY RATING ASSUMPTIONS 21 ratings to issuers in this sector. The scorecard factors may be evaluated using historical or
LIMITATIONS 21 forward-looking data or both.
APPENDICES 23
MOODY’S RELATED PUBLICATIONS 45
We also discuss other considerations, which are factors that are assessed outside the scorecard,
usually because the factor’s credit importance varies widely among the issuers in the sector or
Analyst Contacts:
because the factor may be important only under certain circumstances or for a subset of
CHICAGO +1.312.706.9950 issuers. In addition, some of the methodological considerations described in one or more cross-
sector rating methodologies may be relevant to ratings in this sector. Furthermore, since
2
Rachel Cortez +1.312.706.9956 ratings are forward-looking, we often incorporate directional views of risks and mitigants in a
Associate Managing Director
rachel.cortez@moodys.com qualitative way.
Tom Aaron +1.312.706.9967
Vice President – Senior Credit Officer As a result, the scorecard-indicated outcome is not expected to match the actual rating for
thomas.aaron@moodys.com each issuer.
DALLAS +1.214.220.4350 Our presentation of this rating methodology proceeds with (i) the scope of this methodology;

Sarah Jensen +1.214.979.6846 (ii) a sector overview; (iii) the scorecard framework; (iv) a discussion of the scorecard factors;
Assistant Vice President – Analyst / RPO (v) other considerations not reflected in the scorecard; (vi) the assignment of issuer-level and
sarah.jensen@moodys.com instrument-level ratings; (vii) methodology assumptions; and (viii) limitations. In Appendix A,
we describe how we use the scorecard to arrive at a scorecard-indicated outcome. Appendix B
NEW YORK +1.212.553.1653
shows the full view of the scorecard factors, sub-factors, weights and thresholds. Appendix C
Alfred Medioli +1.212.553.4173 describes our approach for assigning instrument ratings for K–12 school districts.
Senior Vice President / Manager / RPO
alfred.medioli@moodys.com
Naomi Richman +1.212.553.0014
Senior Vice President
naomi.richman@moodys.com

>>contacts continued on the second-to-last page 1 In our methodologies and research, the terms “scorecard” and “grid” are used interchangeably.
2 A link to a list of our sector and cross-sector methodologies can be found in the “Moody’s Related Publications”
section.