Moody's Investors Service downgraded Manchester's general obligation bonds to Aa2 from Aa1 citing a recently enacted property tax cap.

The downgrade affected $193 million in debt.

Moody's also downgraded Manchester's appropriation-backed school facility revenue bonds to Aa3 from Aa2, affecting $77 million in debt.

Both ratings' outlooks are stable.

The city's satisfactory financial position is under pressure because of the tax cap, Moody's analysts Nicholas Lehman and Michael D'Arcy wrote.

The city benefits from its status as a regional economic center with a large commercial presence, a large and diverse tax base, and satisfactory financial reserves, Lehman and D'Arcy wrote.

For challenges, the analysts pointed to the city's above average debt burden, continuing full valuation declines and pressures from fixed expenditures, in addition to the tax cap.

Manchester is the largest city in New Hampshire, with a population of 110,000. It is in southeast New Hampshire.

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