A Rhode Island Superior Court judge’s preliminary injunction preventing the state’s capital, Providence, from moving retirees who are 65 and older off the city’s health insurance plan and into Medicare is a credit-negative, said Moody’s Investors Service.

Moody’s rates Providence’s general obligation bonds A3 with a negative outlook.

According to Moody’s, the injunction is a credit-negative because it prevents the city from eliminating an estimated $11.6 million in health care expenses, which would have helped close budget deficits in fiscal 2012 and beyond.

Providence has appealed the decision, but must continue to cover retiree health benefits until at least July, when Judge Sarah Taft-Carter is expected to deliver her final ruling.

Gov. Lincoln Chafee filed a friend-of-the-court brief last week on behalf of Providence.

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