Moody's Investors Service, which downgraded Woonsocket's general obligation unlimited tax rating to B3 from B2, said it could downgrade the city even further.

Woonsocket is under a budget review committee, one step short of receivership under Rhode Island's intervention system.

The rating company's move affects $214 million of debt, including general obligation debt issued through the Rhode Island Health and Education Building Corp.

Moody's cited a short-term liquidity strain that could require an advance in state aid, high and increasing fixed costs, and excessive debt and unfunded pension liability burdens.

The city's next debt payment is due July 15.

Fitch Ratings assigns a B rating to the GO bonds.

Woonsocket, with a 41,000 population, is home to CVS Caremark Corp.

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