Moody’s Investors Service downgraded the Utica, N.Y.’s general obligation rating to Baa1 from A3, affecting $64.99 million of outstanding debt.
The outlook remains negative at the lower rating.
The rating follows a downgrade from Fitch Ratings earlier this month to BBB from A-minus on the city’s unlimited-tax general obligation bonds.
“The downgrade to Baa1 reflects fiscal deterioration beyond what the city previously projected,” Moody’s analysts said in a report.
The negative outlook reflects Moody’s expectation that the city will be “challenged to achieve structural balance over the near term.”
Failure to achieve a long-term structurally balanced budget and potential challenges to accessing the capital markets to finance cash flow borrowing could make the rating go down, according to Moody’s.