Moody's Investors Service said it has downgraded the city of Waverly, Iowa's general obligation rating to Aa3 from Aa2.
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Concurrently, Moody's has assigned a Aa3 rating to the city's $7.4 million general obligation bonds, Series 2014A. Debt service on the bonds is secured by the city's GO unlimited tax pledge. Proceeds of the bonds will finance multiple capital improvement and expansion projects. The city has $18.3 million of rated GO debt outstanding, post-sale.
The Aa3 rating is based upon the city's small but stable tax base, the value of which is well below the median for Aa rated cities, satisfactory general fund reserves, moderate revenue raising flexibility, and high debt burden with future borrowing planned.
