The two biggest rating agencies took divergent paths, whipsawing Stratford, Conn., with an upgrade and a downgrade of its general obligation rating within a 45 minute period.

At 3:45 p.m. on Sept. 20, Moody’s Investors Service downgraded Stratford to A1 from Aa3. At 4:32 p.m. Standard & Poor’s, which is adopting new rating criteria, upgraded the town of about 51,000 to AA from AA-minus.

The actions affect $165 million in outstanding debt, according to Moody’s.

The agencies point to different factors in explaining their rating actions.

For its part, Moody’s analyst Thomas Compton and Geordie Thompson pointed to the town’s narrow general fund balance position and diminished financial flexibility due to a high fixed cost structure. They also noted the town’s elevated debt burden, which they said would increase with a pension obligation bond issue the town is about to sell.

Standard & Poor’s analysts Hilary Sutton and Danielle Leonardo saw things differently. Instead of limited financial flexibility, they think the town has strong budgetary flexibility with reserves at 5.7% of general fund expenditures.

The town also has very strong cash levels and strong management conditions, Sutton and Leonardo wrote.

Finally, the S&P analysts said the upgrade reflected the town’s very strong economy.

The agencies agreed on one point: the town has a high level of debt and other liabilities. These mainly consist of high net direct debt and large pension and other postemployment benefit liabilities.

Both agencies have stable outlooks on their ratings.

Stratford is expected to sell $16.4 million in general obligation refunding bonds on Sept. 30 with the new ratings.

Moody's and S&P spokesmen declined to comment on how frequent it was for their rating actions to move in opposite directions. S&P spokesman Ola Fadahunsi said that S&P believes the town has strong "budgetary" flexibility but not necessarily "financial" flexibility.

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