Moody’s Affirms Rating for Warren, Upgrades Credit Outlook
WARREN, Ohio – Moody’s Investors Service has affirmed Warren’s bond rating of Baa1 and upgraded the city’s credit outlook to stable from negative.
Warren currently has $9.3 million outstanding in general obligation limited tax debt, $4.2 million of which is rated by Moody’s.
“The Baa1 issuer rating reflects the city’s challenged economy and tax base, characterized by elevated unemployment, weak demographic patterns, stagnant property values and low resident income indices,” Moody’s said in its release. “Additionally factored are the city’s modest operating fund balance and liquidity that is expected to strengthen over the near term as a result of a temporary voter approved income tax increase that went into effect January 1, 2017.”
The rating also includes the city’s moderate debt and elevated pension burden, it continued.
Helping improve the credit outlook was the approval of a 0.5% temporary income tax to support operating resources, mainly improving the city’s roads and public safety.
Among the factors that could lead to another credit upgrade, Moody’s reported are in increase in the city’s tax base, sustained improvement of the city’s operating fund balance and liquidity and moderating Warren’s pension burden.
Moody’s also highlighted factors that could cause the agency to downgrade the rating again, including contraction of the tax base by rising unemployment, reduced income tax collections and valuation loss.
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