NEW YORK - Moody's Investors Service said it has assigned a Baa1 rating and a negative outlook to the county of Blair, Pa.'s $8.7 million general obligation bonds consisting of $4.6 million general obligation bonds, Series of 2007A and $4.1 million general obligation bonds, Series of 2007AA, and downgraded to Baa1 from A3, and applied the negative outlook to, the long-term rating on the county's approximately $26.6 million of outstanding parity debt.
The current bonds are secured by the county's general obligation, unlimited tax pledge. Proceeds from the Series 2007A bonds will be used to repay a $4.5 million bank loan and mature in 2012. Proceeds from the Series 2007AA bonds will be used to finance capital projects.
The downgrade to a Baa1 rating reflects the county's narrowed financial position after several years of operating deficits. The Baa1 rating also incorporates the county's relatively large tax base with a below average demographic profile, stagnant economy, and average debt service.
The negative outlook reflects the limited revenue raising ability of the county and the expectation that it will be challenged to regain structural balance and reverse a multi-year trend of declining reserves prior to realizing the benefits of effectuating a revaluation in fiscal 2010, at the earliest.
The current bonds are expected to be insured by Ambac. Subject to Moody's review of the insurance policy and other relevant documents, the bonds are expected to receive Ambac's financial strength rating of Aaa.
