Moody's Investors Service said it downgraded to Aa2 from Aa1 the rating on the city of Green Bay, Wis.'s general obligation debt, and to A1 from Aa3 the city's outstanding 2010 lease revenue bonds.
The bonds are secured by the city's general obligation unlimited tax pledge, and the 2010 lease revenue bonds are secured by the city's annual appropriation pledge.
Moody's also assigns an A1 rating on the city of Green Bay Redevelopment Authority's (RDA) $25 million taxable lease revenue bonds, Series 2013. The city intends to use hotel room tax and tax increment revenues to pay for debt service, though the bonds are ultimately secured by the city's general fund revenues. Bond proceeds will finance expansions and improvements to the KI Convention Center. Post-sale, the city will have $136.4 million of general obligation debt outstanding and $39 million lease revenue debt outstanding.
The Aa2 general obligation rating reflects the city's role as a regionally important economic center; weak demographics; satisfactory financial operations with narrowed liquidity; and above average debt burden with slow amortization.
The A1 lease revenue rating on the 2010 bonds reflects the non-essential nature of the pledged asset, a parking ramp, and the risk of annual non-appropriation.
The A1 rating on the current issuance, the 2013 bonds, reflects the non-essential nature of pledged asset, and pledge of general fund revenues to pay for debt service.