NEW YORK - Moody's Investors Service said it has downgraded the city of Mabank, Texas's rating to Baa2 from A2 affecting $8.1 million in outstanding parity debt.

Concurrently, Moody's has assigned a negative outlook. The bonds and certificates are secured by a direct levy against all taxable property, within the limits prescribed by law. The certificates are further secured by a limited pledge of the net revenues of the city's waterworks and sewer system.

The downgrade to the Baa2 rating is based on the cty's declining reserves and liquidity combined with a limited and concentrated economy.

The city has experienced four consecutive years of declines in general fund balance along with declines in liquidity. The city has a concentrated tax base with the top ten taxpayer composing 34.4% of assessed values.

The negative outlook reflects the uncertainty of management's ability to bolster reserves evidenced by prior deterioration of the general fund balance.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.