Moody's Investors Service said it has downgraded the Borough of Merchantville, N.J.'s rated general obligation bonds to A2 from A1, affecting $864,000 in outstanding parity debt.
The bonds are secured by the borough's unlimited property tax pledge.
The A2 rating reflects the borough's limited tax base size, above average debt burden, and narrow financial position.
The downgrade also incorporates the borough's trend of structurally imbalanced financial operations evidenced by fund balance draw-downs in the last five fiscal years, and limited revenue raising ability.