Moody's Investors Service said it has downgraded the city of Utica, N.Y.'s general obligation rating to Baa2 from Baa1, affecting approximately $47 million in outstanding rated debt; the outlook remains negative.
The city's debt is secured by a general obligation pledge as limited by the Property Tax Cap - Legislation (Chapter 97 (Part A) of the Laws of the State of New York, 2011).
The downgrade to Baa2 reflects the city's severely weakened financial position characterized by rapidly draining cash, thin reserves, and a reliance on the capital markets to fund operations. The rating also incorporates a heavy debt burden, a weak tax base that includes significant amounts of vacant or tax-exempt properties, and high fixed costs.
The negative outlook reflects the ongoing challenges in restoring structural balance to the city's operations, as well as potential challenges surrounding three impending note maturities and the need for continued access to the capital markets.