Robstown, Texas, Downgraded to Baa2 by Moody's

Moody's Investors Service said it has downgraded to Baa2 from A3 the city of Robstown, Texas's debt and assigned a negative outlook.

Both the bonds and certificates are direct obligations of the city, payable from ad valorem taxes levied against all taxable property within the limits prescribed by law. The Baa2 rating applies to $8.25 million in outstanding Moody's-rated debt. The city has an additional $1 million in debt outstanding that is not rated by Moody's but considered in the credit analysis.

The downgrade to Baa2 reflects the city's limited general fund and cash balances, which continue to rely on support from the city's utility system. The rating further considers wealth levels that are well below average, a small but growing local economy, and an above average debt burden with a slow payout.

The assignment of the negative outlook reflects Moody's expectation of continued pressured operations and deterioration of general fund balance, as well as weak historical budget-to-actual performance of the general fund.

For reprint and licensing requests for this article, click here.
MORE FROM BOND BUYER