NEW YORK - Moody's Investors Service said it has downgraded the city of Woonsocket, R.I.'s underlying general obligation rating to Ba2 from Ba1. The outlook is negative. At this time, Moody's has also downgraded the city's underlying rating on the Rhode Island Health and Education Building Corporation bond issue, Series 2009E to Ba2 from Ba1.
The outlook is negative. All outstanding debt is secured by the city's general obligation, unlimited tax pledge.
The downgrade to Ba2 rating reflects a continued deterioration of the city's school operating financial position despite the recent issuance of deficit bonds due to multiple deficits in previous years. The negative outlook reflects the city's near-term credit stress due to the continuation of deficits in the school unrestricted fund and ongoing underfunding of the locally administered pension plan.