Moody's Investors Service downgraded to A3 from A1 the borough of Maywood, N.J.'s $8.9 million of outstanding debt secured by a general obligation unlimited-tax pledge.

The downgrade reflects the borough's narrowed financial position that is expected to remain challenged in the near term. The rating also reflects a modest $1.7 billion tax base, above-average wealth levels, and low debt burden.

Maywood posted operating deficits from fiscal 2002 through fiscal 2006, drawing down the current fund balance from a healthy $1.2 million, or 12.3% of revenue, to a narrow $246,000, or 1.9% of revenue in fiscal 2006.

In fiscal 2007 and 2008, the government posted modest operating surpluses resulting in a current fund balance of $472,000, or a still narrow 3.3% of annual revenue.

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