Moody's Investors Service has assigned a Baa1 rating to the city of New Haven, Conn.'s $121.8 million general obligation bonds, issue of 2016, Series A.
Concurrently, Moody's has downgraded the rating to Baa1 from A3 on the city's approximately $530 million outstanding GO bonds. The outlook is stable.
The downgrade to Baa1 reflects the city's continued narrow financial position and the on-going reliance on debt restructurings and financing proceeds to address its financial challenges, Moody's said. Cash flow positive debt restructurings have contributed to improvement in the city's financial position. The city, however, will be challenged to meaningfully increase recurring revenues or reduce on-going expenses, the rating agency said.
The rating also factors in the city's sizeable liabilities for pension and OPEB benefits as well as the highly leveraged debt position, Moody's said. The rating favorably incorporates the sizeable tax base which is anchored by higher education and healthcare, with resident income levels that are well below average.
