Moody's Investors Service has downgraded to Aa2 from Aaa the rating on Orange County, N.Y., $268.5 million outstanding general obligation debt.
This action concludes a review for downgrade that Moody's had initiated on January 15 in conjunction with its new local government general obligation methodology.
The outlook remains negative. The county's debt is 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 downgrade to Aa2 reflects an ongoing multiyear trend of operating deficits and declines in reserve levels, in combination with recent property value declines. Factors supporting the Aa2 rating include still-adequate reserve levels, a large tax base with above average wealth levels and average debt burden. The negative outlook reflects the expectation that operating deficits and reserve draws will continue in the near term.
