Moody's Investors Service said it has downgraded to A2 from Aa3 the rating on the town of Oyster Bay, N.Y.'s outstanding general obligation debt.

The outlook remains negative.

The downgrade to A2 reflects the town's deteriorating financial position due to multiple years of structural imbalance resulting in significant declines in reserve levels. The rating also reflects the town's sizeable and wealthy tax base and manageable debt burden.

The assignment of the negative outlook reflects Moody's belief that the town will continue to be challenged in the near-term to restore structural balance and increase reserves.

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