Moody's Investors Service downgraded the town of Middletown, Del.'s $43.5 million of outstanding general obligation debt to A1 from Aa3, and assigned a negative outlook.

The bonds are secured by a unlimited-tax GO pledge.

The downgrade reflects a decline in financial flexibility driven by substantial reserve reductions for capital purposes, a modestly sized tax base with below-average socioeconomic indexes, and a manageable debt burden.

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