Moody's Investors Service said it has downgraded to Aa3 from Aa2 the general obligation rating of the city of Fremont, Ohio, in conjunction with the sale of $7.3 million general obligation limited tax various purpose refunding bonds, Series 2012.
Concurrently, Moody's has assigned the Aa3 rating to the city's long-term general obligation limited tax debt, of which $9.9 million will be outstanding following the current sale.
Debt service on the bonds is secured by the city's general obligation limited tax pledge, subject to the state of Ohio's (general obligation rated Aa1/stable outlook) ten-mill limitation. Proceeds will be used to refund the city's outstanding general obligation limited tax bonds, Series 2003 for expected interest savings.
The downgrade to the Aa3 rating reflects the city's modest tax base characterized by a relatively weak socioeconomic profile.
The rating also incorporates the expectation that financial operations and general fund reserves will remain healthy, despite recent declines in fund balance and dependence on economically-sensitive income tax revenues generated within a considerably concentrated tax base.