Standard & Poor's Ratings Services said it lowered its long-term rating on the village of Whiting, Wis.' 2013 general obligation (GO) promissory notes three notches to BBB-minus from A-minus.
The outlook is stable.
"The downgrade reflects our view of the village's very weak management," said Standard & Poor's credit analyst Carol Spain. The village missed its Sept. 2, 2014 interest payment on its promissory notes dated June 5, 2013. It made the interest payment on Sept. 9, 2014, which is within our five-business day grace period following the payment due date.
Whiting's unlimited-tax, full faith and credit GO pledge secures the promissory notes.
The late payment was due to an oversight by management rather than an unwillingness to support its obligations.
"The rating also reflects our assessment of the village's weak budgetary performance and debt and liabilities position," said Spain, "along with its weak economy."
"The stable outlook reflects our assessment of the village's management as very weak," she added, "and our belief that the village has the capacity to make full and timely debt service payments."
While the village has taken action to mitigate the risk of late debt service payments, a higher rating would require demonstration that that new practices are sufficient. While another missed payment is unlikely, the rating could be lowered further if it occurs.
