Groton, Conn., Cut to Aa3 by Moody’s

NEW YORK - Moody's Investors Service said it has downgraded to Aa3 from Aa2 the city of Groton, Conn.'s long-term general obligation rating on approximately $41.5 million in rated outstanding debt secured by the city's unlimited tax pledge and affirmed the negative outlook.

The downgrade to Aa3 from Aa2 reflects the city's ongoing exposure to the risk of the Thames Valley Communication, Inc (TVC), the city's wholly-owned telecom corporation for which the city has approximately $28.6 million in general obligation debt, including BANs, outstanding.

The Aa3 rating also incorporates the city's satisfactory financial position despite recent weakening, moderately-sized tax base with significant taxpayer concentration, average wealth and income levels, and a manageable debt burden. The assignment of the negative outlook reflects our expectation of additional draws on reserves in fiscal 2012 and continued enterprise risk related to TVC.

For reprint and licensing requests for this article, click here.
MORE FROM BOND BUYER