Moody's Investors Service said it has downgraded Mercer County, N.J., to Aa2 from Aa1 in conjunction with a new sale of $7.6 million county college bonds, Series 2013.
The downgrade to Aa2 affects $495 million of outstanding long term bonds and county-guaranteed bonds issued through the Mercer County Improvement Authority (MCIA).
The outlook has been changed to stable from negative.
The bonds will be secured by the unlimited ad valorem tax pledge of the county. Proceeds from the current issue will finance various capital projects at the Mercer County College.
The downgrade to Aa2 reflects the county's narrowed financial position, characterized by a recent trend of draws on reserves, positioning the credit more in line with Aa2 peers. The rating also factors in the county's large and diverse local economy, with moderate equalized value declines that benefits from the presence of several major institutional employers, and a slightly higher than average but manageable debt position.