Moody’s Investors Service has downgraded the city of Burlington’s sewer revenue bonds one notch to A1 ahead of a planned sale this week of $5.3 million.
The agency also assigned a negative outlook. The move affects $10.4 million of debt, including this week’s offering.
Proceeds will finance updates to the city’s sewer treatment plant, including an increase in capacity and switching to an anaerobic treatment system. “The downgrade to the A1 rating reflects limited liquidity levels, constrained by the sewer enterprise’s support of other enterprises within the city,” analysts wrote.
The negative outlook reflects expectations that liquidity will remain narrow in the near term and may be reduced further due to sewer-fund support of non-essential service enterprise funds of the city.