Moody's Investors Service said it has downgraded the rating on the village of Matteson, Ill.'s outstanding general obligation debt to B1 from Ba1.
Concurrently, Moody's has downgraded the rating on the village's outstanding general obligation limited tax (GOLT) debt certificates to B3 from Ba2. The outlook remains negative.
The B1 GO rating reflects the village's rapidly deteriorating financial position that includes ongoing annual operating deficits and over reliance on inter-fund borrowing. The rating also reflects the village's elevated debt profile, limited revenue raising flexibility, and significant tax base declines.
The distinction between the village's B1 GO rating and B3 GOLT rating reflects the weaker security on the GOLT debt certificates, which do not benefit from a dedicated property tax levy.
The rating distinction also reflects the elevated risk inherent in the debt service structure of the certificates, which will significantly increase annual debt service costs and pressure the village's financial operations in the medium term.
