CHICAGO - Moody's Investors Service lowered Des Moines, Iowa's rating by one notch to Aa2 due to its narrow operating reserves, below average income, and elevated debt burden.
The review was prompted by the rating agency's change in local government rating methodology. The action impacts $437 million of long term general obligation bonds. The outlook is stable.
"Despite these challenges, the city's large and stable tax base, key roles as the state capital and the primary economic and population center of the state of Iowa, and recent history of surplus operations support its Aa2 rating," Moody's said.
The stable outlook reflects analysts' expectation that the city's tax base will remain stable given its solid position as the economic engine of the state and that recent growth in general fund reserves will be maintained.
