Standard & Poor's Ratings Services said it lowered its long-term and underlying rating to B-minus from B on Allen Park City, Mich.'s unlimited-tax general obligation bonds and limited-tax GO bonds, some of which were issued by the Allen Park Building Authority, and the Allen Park Brownfield Redevelopment Authority.
At the same time, Standard & Poor's removed the ratings from CreditWatch with negative implications. The outlook is stable.
"The lowered rating reflects our view that, despite the state's installation of an emergency financial manager, who has developed a plan to improve the city's finances and return to a positive fund balance by fiscal 2015, the city remains severely pressured financially," said Standard & Poor's credit analyst Caroline West. "Even with the emergency financial manager's help, we believe the city still faces significant challenges to improve its financial standing," West added.
As a result of the deteriorating finances, in October 2012, the governor of Michigan declared a financial emergency in the city after an extensive review of the city's financial standing, concluding that no satisfactory plan existed to solve the city's serious financial problems and that city officials could not solve these problems without outside assistance. Pursuant to Public Act 72, the governor appointed an emergency financial manager.