Moody's Investors Service said it has downgraded the borough of Seaside Heights, N.J., to A3 from A2, affecting $5.8 million in outstanding rated bonds.
The bonds are secured by the borough's general obligation, unlimited tax pledge.
The downgrade to A3 reflects the expectation of financial pressure from increases to an already high debt burden to pay for Hurricane Sandy recovery costs and projected 2013 declines in beach-related revenues, which constitute a significant 41% of total current fund revenues, as the borough works to rebuild.
The A3 rating also incorporates the borough's limited, declining tax base and below-average wealth levels.
