Moody's Investors Service said it has downgraded to A2 from A1 the rating on Pine City, Minn.'s outstanding general obligation debt.
Concurrently, Moody's has assigned an A2 rating to the new sale of $610,000 general obligation improvement crossover refunding bonds, Series 2012B. The A2 rating applies to $16.3 million of post-sale general obligation debt.
The bonds are secured by the city's general obligation unlimited tax pledge. Proceeds of the bonds will refund certain maturities of the city's outstanding general obligation improvement bonds, Series 2008A for estimated net present value savings of 4% of refunded par.
The A2 rating reflects the city's small and concentrated tax base with significant declines in valuation, satisfactory financial operations with recent significant decline in liquidity in the general fund and other funds, and an elevated debt burden that is supported by non-levy sources.