Moody's Investors Service said it has downgraded the general obligation rating on the city of Niagara Falls, N.Y.'s $65 million in outstanding general obligation debt to Baa3 from Baa1/on review for downgrade; the outlook is negative.
The bonds are secured by a general obligation pledge as limited by the Property Tax Cap - Legislation (Chapter 97 (Part A) of the Laws of the State of New York, 2011).
The Baa3 rating incorporates the city's highly stressed liquidity position that the city currently faces given the continued delay in the remittance of casino revenue.
The rating also incorporates the city's weak economy, high unemployment, depressed income levels, and elevated debt position.
The negative outlook reflects the city's projected depletion of cash as early as November 2013 if the money due from the Seneca Nation is not remitted or an alternate liquidity source is not identified.
