Issue: General Obligation Limited School Bonds, Series 2012; Rating: Aa3; Sale Amount: $9,500,000; Expected Sale Date: 11-28-2012; Rating Description: General Obligation Limited Tax

Opinion

Moody's Investors Service has assigned an initial Aa3 rating to Cook County Community Unit School District 401's (Elmwood Park), IL $9.5 million General Obligation Limited School Bonds, Series 2012. The current offering is the district's only Moody's rated debt.

SUMMARY RATINGS RATIONALE

The Series 2012 bonds are secured by the district's general obligation limited tax pledge and benefit from a designated levy with an unlimited rate. The amount of the levy is limited by the district's statutorily authorized non-referendum debt service extension base (DSEB). Commencing with the 2009 levy year the district has been authorized to increase the DSEB by the lesser of 5% or the percentage of the Consumer Price Index growth during the preceding calendar year. The DSEB does not provide adequate coverage for projected debt service on the district's current and planned limited obligation debt. However, the district will use accumulated reserves in its Debt Service Fund. Given the availability of adequate reserves and the presence of a dedicated levy with an unlimited rate, the Series 2012 bonds are rated at the same level as the district's implicit general obligation unlimited tax pledge. The issuer rating of Aa3 incorporates the district's moderately sized tax base located adjacent to the City of Chicago (general obligation rated Aa3 / negative outlook); sound financial operations supported by healthy reserves and alternate liquidity; and manageable debt burden.

STRENGTHS

- Trend of General Fund operating surpluses resulting in solid reserves

- Moderately sized tax base favorably located adjacent to Chicago

- Positive enrollment trends factoring favorably in the state aid formula

CHALLENGES

- Recent declines in assessed valuations

- High dependence on state aid

- Uncertainty regarding funding obligations of the state's teachers pension system

WHAT COULD MOVE THE RATING UP

- Substantial expansion of the tax base

- Strengthening of the socio economic profile

- Significant increase in reserves and liquidity

WHAT COULD MOVE THE RATING DOWN

- Decline in reserves or liquidity

- Changes in the teacher pension funding structure leading to expenditure pressures and operating deficits

- Erosion of the tax base or socio economic profile

- Further leveraging of the district's DSEB beyond current borrowing plans

PRINCIPAL METHODOLOGY

The principal methodology used in this rating was General Obligation Bonds Issued by U.S. Local Governments published in October 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

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For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

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David Levett Associate Analyst Public Finance Group Moody'sInvestors Service, Inc.100 N Riverside Plaza Suite 2220 Chicago, IL 60606 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Mark G. Lazarus Analyst Public Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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