Moody's Investors Service said it has downgraded to Baa2 from Baa1 the rating on the city of Two Rivers, Wis.'s general obligation debt.
Concurrently, it removed the negative outlook.
The city has a total of $19.5 million of GO debt outstanding, of which $5.1 million is rated by Moody's.
The downgrade to Baa2 is based on the inability of the city to make dramatic improvements to general fund reserves and the expectation that the negative unassigned general fund balance will remain weak due to long-term advances to the city's enterprise funds. The Baa2 rating also incorporates the city's small tax base, below average resident wealth levels, weak liquidity position, elevated debt, and low pension burden.
