A federal bankruptcy judge’s approval of collective bargaining contracts between bankrupt Central Falls and retired employees is a credit positive for the city, according to Moody’s Investors Service.

“It establishes a key component of its Chapter 9 bankruptcy plan and moves it closer to budgetary balance,” the rating agency said.

Frank Bailey, hearing the case in the U.S. Bankruptcy Court for the District of Rhode Island in Providence, approved the agreement on Jan. 9.

Central Falls, which has a population  of about 19,000 and an $80 million shortfall, filed for bankruptcy protection on Aug. 1.

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