Breaking - Moody's Downgrades Woonsocket Bonds

Andrew points to the Valley Breeze report that the House has killed the 13% property tax increase requested by the city. Now Woonsocket Council President John Ward has just shared the following. (It appears not to have yet hit any news outlet.) [Addendum: This report was provided by Moody's Investment Service to its subscribers.]

Moody's downgrades Woonsocket's (RI) general obligation rating to B2 from Ba2, remains under review for downgrade

Downgrade of rating applies to $225 million in long-term debt

WOONSOCKET (CITY OF) RI RHODE ISLAND HEALTH & EDUCATIONAL BUILDING CORPORATION Cities (including Towns, Villages and Townships) Rhode Island

NEW YORK, May 24, 2012 -- Moody's Investors Service has downgraded the City of Woonsocket's (RI) underlying general obligation rating to B2 from Ba2, affecting $225 million in long-term debt; the rating remains under review for downgrade. At this time, Moody's has also downgraded the underlying rating on the Rhode Island Health and Education Building Corporation Bond Issue, Series
2009E to B2 from Ba2, for which the city is the sole obligor; the rating remains under review for possible downgarde. All outstanding debt is secured by the city's general obligation, unlimited tax pledge.

SUMMARY RATINGS RATIONALE

The downgrade to B2 reflects the continued deterioration of the city's school operating financial position and severely liquidity position, despite the recent issuance of deficit bonds.

The rating remains under review for downgrade, reflecting the city's near-term credit stress due to a continued deficit in the School Fund, reliance on the implementation of a proposed supplemental tax levy necessary to the successful placement of a tax anticipation note, and ongoing underfunding of the locally administered pension plan.

Edit - The balance of this post has been deleted at the request of a representative of Moody's Investor Service who said, in part,