Moody’s Investors Service downgraded to Baa1 from A1 the underlying rating on the Roosevelt, N.Y., Fire District’s $1.7 million of outstanding rated general obligation bonds.
Concurrently, the rating has been placed under review for downgrade or withdrawal. The bonds are secured by the district’s unlimited tax GO pledge.
The Baa1 rating reflects deterioration of the district’s financial reserves in fiscal 2010 and the potential for further deterioration in fiscal 2011 and 2012. It also reflects the district’s moderately sized tax base and minimal debt burden.
The ongoing review for further downgrade is prompted by Moody’s belief that the district may have had further weakening of financial operations in fiscal 2011, given the need for the district to issue cash-flow notes in fiscal 2012, something it has not done in the past.
The agency is also reviewing the rating for withdrawal due to a lack of information.
If Moody’s can’t obtain sufficient information about the district’s current financial position within the coming weeks, it said it will take appropriate rating action.