Moody's Investors Service said it has downgraded to A2 from A1 the rating on the city of Burlington, Iowa's outstanding general obligation debt and sewer revenue bonds.
Concurrently, an A2 rating has been assigned to the city's $2.5 million taxable general obligation bonds, Series 2013A; $3.7 million taxable general obligation corporate purpose bonds, Series 2013B; $5.9 million general obligation corporate purpose and refunding bonds, Series 2013C;
$1.2 million general obligation refunding bonds, Series 2013D; and sewer revenue bonds, Series 2013E.
Post sale, the city will have $41.5 million of outstanding general obligation debt and $18.9 million of sewer revenue debt (Moody's rates only $15.5 million of the outstanding sewer debt). The city's negative outlook has been removed from the GOS but maintained on the sewer debt.
The A2 rating reflects the city's limited financial position as represented by narrow reserves in its general fund and government-wide funds; stable economy located along the Mississippi River in southeast Iowa (issuer rated Aaa/stable outlook); and manageable though elevated debt burden.
The removal of the negative outlook reflects Moody's expectation that a new management team's implementation of comprehensive plans to improve the city's financial condition will have the intended effect.
