Standard & Poor's Ratings Services said it lowered its long-term rating on Fritch, Texas' existing general obligation to D from BBB-minus.
The downgrade is based on the notice of a material event issued on May 30, in which the city failed to meet its debt service requirements due Feb. 15. At the same time, the agency removed its negative outlook on the rating.
A disclosure filing dated May 30, states that due to mismanagement of the city's finances by a former city employee, the city failed to make its Feb. 15 principal and interest payment. The city is working to implement effective internal controls of its finances and arranging to remedy the delinquent payment for Feb. 15.