Moody's Investors Service said it has downgraded to A1 from Aa3 the rating on Pike County, Pa.'s long-term general obligation bonds, affecting $1.7 million of outstanding debt.

The bonds are secured by the county's general obligation, unlimited tax pledge.

Downgrade of the county's general obligation rating to A1 reflects several years of weak operating performance that have resulted in modest general fund reserve levels despite the reclassification of outside reserves as general fund moneys during fiscal 2011.

The downgrade also factors in sizable full value declines affecting the county tax base since 2008 and growing employee benefit liabilities, including pensions and retiree healthcare.

The A1 rating also reflects the county's sizeable rural, residential tax base with average income and wealth indices, favorable location in commuting distance of major regional employment centers and relatively modest debt burden.

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