Moody’s Investors Service has affirmed the A3 rating for Burlington, Vt.’s $63.2 million of general obligation bonds, while maintaining a negative outlook.
That outlook also pertains to $14.4 million in certificates of participation. Moody’s has a Baa2 rating on $10.4 million of COPs and a Baa1 rating on the other $4 million.
The move follows a lawsuit Citibank filed on Sept. 2 in the U.S. District Court in Vermont, after the city failed to make payments on a $33.5 million lease-financing agreement.
Talks between Burlington Telecom and Citi broke down last November.
The lawsuit seeks seeking tens of millions of dollars in damages and the repossession of Burlington Telecom’s equipment.
“Any potential long-term viability plans for BT to satisfy its obligations to investors and pooled cash account has been put on hold pending the outcome” of the lawsuit, Moody’s wrote.
“The city is reviewing the complaint and will vigorously defend the city’s interests in court,” Mayor Bob Kiss said in a statement.
