Moody's Investors Service said it has downgraded to A1 from Aa3 the rating on the city of Delano, Minn.'s general obligation bonds, affecting approximately $3.79 million in outstanding Moody's rated debt.
The bonds are secured by the city's general obligation unlimited tax pledge, though a portion are supported by storm water revenues or state aid. The city has additional outstanding general obligation debt of approximately $22.82 million which is not Moody's rated.
The downgrade to the A1 rating reflects the city's modestly sized and declining tax base, elevated debt burden, stressed sewer enterprise operations, and overall declining liquidity. The rating also incorporates the city's strong general fund reserves and above average socioeconomic indicators.