CHICAGO - Cedar Rapids, Iowa lost its gilt-edged rating from Moody's Investors Service.
The downgrade to Aa1 from Aaa impacts $342 million of outstanding general obligation debt. The review was initiated due to Moody's criteria change in local government rating methodology.
"The downgrade to the Aa1 rating incorporates Cedar Rapids' above average debt and pension position; enterprise risk associated with the city-owned hotel and convention center; and weaker socio-economic indices compared to similarly rated entities," Moody's wrote.
The rating is supported by the city's large, diverse economy; role as a regional economic center; and strong reserve levels and healthy financial flexibility.
"The stable outlook reflects our expectation that the city's healthy financial reserves will be maintained and its debt position, though above average, will remain manageable," Moody's wrote.