Moody's Investors Service has upgraded the town of East Hampton, N.Y.'s general obligation rating to Aa3 from A1, affecting approximately $115 million of debt; the outlook is stable.
At this time, Moody's assigned the Aa3 rating to the town's $2.04 million various purposes serial bonds of 2013.
The new issue, secured by a general obligation pledge as limited by the Property Tax Cap - Legislation (Chapter 97 (Part A) of the Laws of the State of New York, 2011, will be used to redeem approximately $1 million of previously issued bond anticipation notes, and the remainder will be used for various capital projects.
The upgrade to Aa3 from A1 reflects improvement in the town's financial position over the past three years, the result of conservative budgeting and strengthened financial management practices.
The rating also incorporates the town's significant deficit financing as well as a moderate and shrinking debt burden and sizeable tax base characterized by strong wealth and income levels.
The stable outlook reflects the town's financial position will continue to stabilize given strong budgeting and formal policies to maintain ample reserves.