Moody's Investors Service said it has downgraded to Ba2 from Baa3 the rating on Hayfield, Minn.'s $3 million of Moody's-rated general obligation debt.
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The outlook is negative.
The downgrade to Ba2 reflects the presence of enterprise and contingent liability risk stemming from the city's challenged water and sewer operations and exposure to a senior care facility.
The weak enterprises threaten to further erode the city's already limited liquidity, Moody's said. The Ba2 rating also reflects the city's very limited tax base and highly leveraged debt profile.
