Monrovia, Calif., ICR Lowered to BBB-Plus by S&P

Standard & Poor's Ratings Services said it lowered its issuer credit rating (ICR) to BBB-plus from A on Monrovia, Calif., and lowered its long-term rating to BBB from A-minus on the city's outstanding pension obligation bonds (POBs) and lease revenue bonds, some of which were issued by the Monrovia Financing Authority.

The outlook on all bonds is negative.

"The lowered ratings reflect our view of the substantial drop in the city's available general fund reserves and liquidity and the likelihood that the city's reserve and liquidity levels will remain low in the near-term," said Standard & Poor's credit analyst Li Yang. "The negative outlook reflects our view of the potential fiscal strain related to a lawsuit between the city and a local developer that was filed on Aug. 24, 2012; due to the city's financial situation, if it fails to manage its liquidity needs in the next year, we could lower the rating further," Yang added.

Monrovia is a largely built-out city at the edge of the San Gabriel Mountains in northern Los Angeles County, about 20 miles northeast of downtown Los Angeles.

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