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Moody’s Investors Service has assigned an A2 rating to a trio of general obligation (GO) bonds totaling $78 million issued by the City of Bridgeport.
The rating service also affirmed its A2 rating on approximately $613 million in Bridgeport”™s outstanding GO bonds.
While explaining that the A2 rating “reflects a stable but narrow financial position characterized by a low General Fund balance and weak liquidity,” Moody”™s also placed a “negative outlook” on the city”™s near-term fiscal situation.
“The negative outlook reflects the challenges the city faces in achieving and maintaining structural balance,” Moody”™s stated in its announcement. “Continued high fixed costs, driven by increasing pension costs, will make it difficult for the city to materially grow reserve levels without the use of one-time revenues or cost saving measures. The state of Connecticut’s fiscal pressures will also be a headwind going forward as state aid accounts for almost half of the city’s revenues.”
Moody”™s added that Bridgeport”™s rating viability could receive an upgrade if the city was able to show improvement in its general fund reserves and in its underlying tax base, as well as reducing its reliance on cash flow borrowing while cutting or eliminating its internal service fund deficit.
