Fitch Ratings Wednesday revised the general obligation rating outlook of Woonsocket, R.I., to stable from negative while affirming its B rating.
Its move came one day after Moody’s Investors Service affirmed its B3 rating and negative outlook for the 41,000-population city, home to CVS Caremark Corp.
Moody’s last month downgraded the city from B2, but Rhode Island recently advanced state aid, allowing Woonsocket to meet its July 15 debt-service payment fully and on time.
Woonsocket, which has $214 million in debt outstanding, has scheduled a $115 million GO bond sale for later this month.
Fitch said its outlook revision “reflects progress in implementing key objectives in a five-year deficit reduction plan including labor concessions and a supplemental tax levy approved by the state legislature.”
Woonsocket is under a budget review committee, one step short of receivership under Rhode Island’s intervention system for struggling municipalities.
Fitch views such intervention positively, while acknowledging it reflects the seriousness of Woonsocket’s financial problems. “The commission’s support in restructuring city finances and stabilizing liquidity will continue to be key to the city’s fiscal recovery,” the rating firm added.
