Moody's Investors Service said it has downgraded to A1 from Aa3 the general obligation rating of the city of Beaver Dam, Wis.
Concurrently, an A1 rating has been assigned to the city's $2 million 2014 general obligation promissory notes. The notes are secured by the city's general obligation unlimited tax (GOULT) pledge. Approximately $1.6 million of the note proceeds will be used to finance city capital improvement projects while $420,000 will be used to finance storm water enterprise system improvements.
The A1 rating applies to $25.4 million of outstanding GOULT debt, inclusive of the current offering.
The downgrade to A1 reflects the city's diminished liquidity position primarily as a result of underperforming wastewater enterprise operations.
Also incorporated in the rating is the city's moderately sized tax base; consistent governmental operations outside of enterprise pressures; below average socioeconomic characteristics; manageable pension exposure; and elevated debt burden.
