Moody's Revises Wayne County Outlook to Negative

Moody’s Investors Service last week affirmed its Baa2 rating on Wayne County, Mich., but revised the outlook to negative from stable.

The county, which includes Detroit, has $445 million of outstanding limited-tax general obligation bonds.

The rating reflects the county’s “ongoing financial stress” reflected in its general fund balance that could take several years to cure, Moody’s said in the report.

The rating also reflects the county’s large tax base, manageable debt portfolio and regional and statewide economic challenges.

“Assignment of the negative outlook is based upon the county’s slim operating margins and reflects the probability that overall credit quality could weaken in the near term,” analysts wrote.

“The negative outlook also incorporates the ongoing deterioration of the city of Detroit’s credit quality and uncertainty related to how a possible bankruptcy filing by the city could impact the county,” they said.

Last year, Moody’s cut the county to Baa2 from A3 and Fitch Ratings cut it to BBB-plus from A-minus. Standard & Poor’s rates it A-minus. 

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Michigan
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