CHICAGO Moody’s Investors Service downgraded Green Bay, Wis.’s general obligation rating one notch to Aa2 as it prepares to sell $25 million of taxable lease revenue bonds to finance convention center improvements.
Moody’s assigned an A1 rating to the new issue being sold through the Green Bay Redevelopment Authority. That represents a one-notch downgrade in the city’s 2010 lease bonds which are secured by an annual appropriation pledge. The general obligation rating was lowered from Aa1.
The city intends to use hotel room tax collections and tax increment revenues to pay debt service on the new lease bonds, though the bonds are ultimately secured by the city’s general fund revenues. Bond proceeds will finance an expansion and improvements to the KI Convention Center.
After the sale, the city will have $136 million of GO debt and $39 million of lease revenue debt.
“The Aa2 general obligation rating reflects the city’s role as a regionally important economic center; weak demographics; satisfactory financial operations with narrowed liquidity; and above average debt burden with slow amortization,” Moody’s wrote.
The A1 lease revenue rating on the 2010 bonds reflects the non-essential nature of the pledged asset, which is a parking ramp, and the risk of annual non-appropriation. The A1 rating on the upcoming issuance reflects the non-essential nature of pledged asset, and pledge of general fund revenues to pay for debt service, Moody’s said.
