Moody’s Investors Service downgraded Utica’s general obligation rating to Baa2 from Baa1.
The outlook remains negative.
The downgrade affects $47 million in debt.
The downgrade is partially due to the city’s severely weakened financial position, wrote Moody’s associate analyst Dan Seymour, who cited rapidly draining cash, minimal reserves and reliance on the capital markets.
The downgrade is also due to a heavy debt burden, weak tax base with many vacant and tax-exempt properties and high fixed costs, Seymour wrote.
The negative outlook is partly due to potential challenges concerning three impending note maturities and the general need to access the capital markets.
In Seymour’s estimation, Utica’s one significant strength is its moderately sized stable tax base.