May 30--MANCHESTER -- More than $250 million of municipal debt was downgraded by Moody's Investors Service this week.
They downgraded the rating to Aa3 from Aa2 the city's $178.5 million of general obligation debt and lowered to A1 from Aa3 some $73.8 million in appropriation-backed school facility revenue bonds.
The downgrade for the larger portion "reflects the city's challenged financial operations, resulting in reduced reserves that will stabilize in the near term, but will be pressured by the local tax cap in the future," Moody's announced. "The rating also incorporates elevated debt and pension liabilities as well as a sizeable and diverse tax base with average socioeconomic indicators."
In providing an outlook, Moody's wrote: "The stable outlook reflects our expectation that the city's financial operations will stabilize over the near term given the override to the tax cap in fiscal 2015, which will enable the city to balance operations, but limit the ability to build reserves and liquidity."
Moody's also assigned a rating of Aa3 to $33.8 million in general obligation bonds expected to be sold June 17.
Generally, higher bond ratings generate lower borrowing costs.
(c)2015 The New Hampshire Union Leader (Manchester, N.H.)
Visit The New Hampshire Union Leader (Manchester, N.H.) at www.unionleader.com
Distributed by Tribune Content Agency, LLC.
© Tribune Content Agency, source Regional News