Moody's Investors Service said it has downgraded to Aa1 from Aaa the general obligation rating of the city of Evanston, Ill.
The city has $154 million of outstanding Moody's rated general obligation debt and $70 million of outstanding unrated Illinois Environmental Protection Agency (IEPA) loans. The rating has been removed from review for possible downgrade.
The city's outstanding general obligation debt is secured by a property tax that is unlimited as to rate or amount.
The downgrade of the city's GO rating to Aa1 from Aaa reflects the city's sizable outstanding pension liabilities. Also incorporated in the rating action is city's satisfactory general fund operations, sizable tax base with institutional presence provided by Northwestern University (revenue rated Aaa / stable outlook), and above average, though manageable, debt burden.
The city's rating was placed on review for downgrade due to its large adjusted net pension liability relative to its rating category.