Standard & Poor's Ratings Services said it lowered its rating on North Haledon, N.J.'s outstanding general obligation (GO) bonds to AA-minus from AA.
The outlook is stable.
"The downgrade reflects North Haledon's weakened financial position and projections for further reductions in reserve levels for fiscal 2014," said Standard & Poor's credit analyst Danielle Leonardis. The stable outlook reflects our expectation that the borough will maintain, at least, adequate reserve levels and work toward restoring fiscal balance."
The borough's proximity to diverse, regional employment bases and strong wealth and income indicators lend stability to the rating. If the borough continues to appropriate reserves for subsequent budgets, greater than the amount it replenishes, and reserves and flexibility further diminish, the agency could consider another downgrade. However, if the borough is able to stabilize and improve its financial position and reserve levels, the agency may consider raising the rating.
