Moody’s Downgrades R.I.’s West Warwick to Baa1

Moody’s Investors Service has downgraded $27 million of outstanding general obligation unlimited-tax debt issued by West Warwick, R.I., to Baa1 from A1.

The rating downgrade reflects the agency’s expectation that the town’s already narrow financial position will be further strained by a sizable, unfunded pension liability.

The Baa1 rating also reflects the town’s limited tax base, below average wealth and income levels, and manageable debt burden.

The negative outlook reflects Moody’s belief that the town will remain challenged to restore structural balance in the face of growing pension liabilities as a result of continued underfunding of the annual required contribution.

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