Clark County Falls to A1

Moody’s Investors Service Monday dropped Clark County’s unlimited-tax debt to A1 from Aa3 due to a weakened fiscal position and limited cash reserve. 

The downgrade affects $22.5 million of general obligation and lease rental bonds.

Clark County, located north of Louisville, has seen its balance sheet decline since 2007, analysts said. An increase in operating expenses coupled with flat revenues has led to shortfalls for the last few years.

County officials plan to impose a new local-option income tax and are expecting a one-time payment from Indiana for various back taxes, Moody’s said. It warned that management would have to be more careful about fiscal oversight and conservative budgeting in order to achieve a structural balance.

Clark County has a manageable amount of debt that is all fixed rate, with no derivatives, according to analysts.

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