Standard & Poor's Ratings Services said that it lowered its long-term rating on Camden, Ala.'s general obligation water and sewer warrants to BBB-minus from BBB-plus.
The outlook is stable.
"The lower rating reflects the recurring deficits reported by the city, resulting in a negative available general fund balance," said Standard & Poor's credit analyst Edward McGlade.
"The rating reflects our assessment of the city's very weak budgetary flexibility and weak budgetary performance," he added, "along with weak liquidity." Other factors include its: weak management conditions; very weak economy; weak debt and contingent liability profile; and strong institutional framework.
The city's full faith and credit secures the warrants, which are further secured by a special pledge of water and sewer revenues.
"The stable outlook reflects our opinion of Camden's weak budgetary performance and very weak budgetary flexibility. It also reflects our view of the city's weak management team, which has not been able to adhere to its policies and improve finances."
Camden could face budgetary challenges in the near-to-medium term if it does not take steps to improve its finances. Continued imbalanced operations could also lead to deterioration in the liquidity position, which could lead to a lower rating.
