Moody's Investors Service has downgraded to A2 from A1 the rating on Berkeley Township, N.J.'s general obligation bonds and assigned a negative outlook, affecting $10.8 million in parity debt obligations.
The bonds are secured by the township's general obligation unlimited tax pledge.
The downgrade to A2 reflects Berkeley's very narrow financial position with minimal reserves and a sizeable school tax deferral. The rating also incorporates the township's sizeable tax base with a large retiree population and a below average direct debt burden.
The negative outlook reflects the township's limited ability to offset potential budget variations given very narrow reserve levels. The outlook also incorporates anticipated short-term losses to the township's ratable base, which may strain the township's primary revenue source.
