Standard & Poor's Ratings Services said it lowered its rating on Peoria, Ill.'s outstanding general obligation bonds to AA-minus from AA.
The outlook is stable. It also assigned a AA-minus rating to the city's series 2014A GO bonds.
"The downgrade reflects the city's very weak debt and contingent liabilities position, including low pension funded levels, and an unassigned general fund balance that's below the formal policy level," said Standard & Poor's credit analyst John Kenward.
The rating agency said it lowered the management score to strong from very strong to reflect the unassigned general fund balance. Because the management score is 20% of the overall rating score under its local GO criteria, a change in the management score to strong was a key factor in the downgrade.
