Moody's Investors Service said it has downgraded to A1 from Aa3, the rating on the city of Portage, Wis.'s outstanding general obligation unlimited tax debt.
Concurrently, Moody's has assigned an A1 rating to the city's $5.6 million general obligation corporate purpose bonds, Series 2012A; $2 million general obligation promissory notes, Series 2012B; and $2.2 million taxable general obligation corporate purpose bonds, Series 2012C. The A1 rating applies to $14.6 million of post-sale GO debt.
The bonds and notes are secured by the city's general obligation unlimited tax pledge.
The Series 2012A bonds will finance various capital projects and also refund the city's outstanding Series 2004, 2006, and 2007 GO bonds for savings. The Series 2012B notes will finance various capital improvement projects. The Series 2012C bonds will refund the city's outstanding state trust fund loan for savings, and a portion of the proceeds will reimburse the city for capital improvement expenditures incurred out of the vehicle replacement fund.
The downgrade to the A1 rating reflects weak cash management protocols, the city's modestly-sized tax base that has experienced a slow-down in growth, and below average income indices that have weakened over the last decade. The rating additionally incorporates the city's adequate financial operations and moderate debt burden.