Moody's Investors Service said it has downgraded to Aa2 from Aa1 the rating on Sheboygan County, Wis.'s general obligation debt and has removed the negative outlook.

Moody's assigned a Aa2 rating to the county's general obligation promissory notes. Post-sale, the county will have $32.4 million in outstanding general obligation debt.

The notes are secured by the county's general obligation unlimited tax pledge. Proceeds from the notes will finance various highway and roadwork improvement projects as well as refund the county's outstanding Series 2006 notes for estimated present value savings of $65,000, or 3.8% of refunded par.

The downgrade to Aa2 rating reflects the county's moderately sized and declining tax base; average demographic profile; narrowed financial operations that have improved due to a one-time transfer from other funds; and a manageable debt profile with rapid principal amortization.

Removal of the negative outlook is based on the expectation that the county will continue to address the structural imbalance that has narrowed general fund reserves through operational efficiencies and budgetary management.

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