Reading School District’s Bond Rating Dropped

Map of Berks County, Pennsylvania, United States Public School Districts (Photo credit: Wikipedia)

The Reading School District has faced some major financial challenges lately, and it’s not going unnoticed.

Citing budget struggles and a $15 million accounting mistake discovered last year, Moody’s Investors Service, a major credit-rating firm, has lowered two district bond ratings by two levels.

Moody’s announced last week the district’s underlying general obligation rating was lowered to Baa2 from A3, and its enhanced rating was lowered to A3 from A1.

The outlook for both ratings, a release from Moody’s says, is negative.

Read more: http://readingeagle.com/article.aspx?id=502171

Pittsburgh Targets Ending Financial Oversight (Act 47)

English: Senator Bob Casey (D-PA) meets with Pittsburgh Mayor Luke Ravenstahl. (Photo credit: Wikipedia)

After eight years of austerity, the city of Pittsburgh today will argue before a state panel that it has clawed its way to financial recovery and needs fewer mentors looking over its shoulder.

A public hearing on ending the city’s financially distressed status, and disbanding one of its oversight groups, begins at 4 p.m. in the city council chamber.

As of Friday, officials hadn’t decided whether to televise the hearing.

Mayor Luke Ravenstahl and his team will have 20 minutes to argue that establishing a trust fund for retiree health care, improvements to the capital budget process and bond rating upgrades, among other factors, warrant the city’s exit from Act 47, the law that imposes monitoring and financial restrictions on distressed municipalities.

Read more: http://www.post-gazette.com/stories/local/state/pittsburgh-targets-ending-financial-oversight-659655/#ixzz2AjL63Hnp

Allentown’s Bond Rating Downgraded To A3 With A Negative Outlook

English: City of Allentown from east side (Photo credit: Wikipedia)

Allentown‘s bond rating has been downgraded from A2 to A3 with a negative outlook, Moody’s Investors Service announced this week.

According to Moody’s, the new rating reflects the city’s approximately $120.3 million debt as well as “four consecutive operating deficits which have largely been driven by aggressive budgeting of city revenues and reserve appropriations to balance the budget.”

Investors use credit ratings such as Moody’s to determine the risk of a municipality’s defaulting on debt payments. A lower rating can force municipalities to pay higher interest rates to compensate for the risk, increasing the cost of borrowing.

Allentown’s weak socioeconomic profile — a sizable and mature urban tax base with below-average “socioeconomic indices” — and limited financial flexibility are challenges to the city, according to Moody’s.

Read more: http://www.mcall.com/news/local/allentown/mc-allentown-pa-bond-rating-downgrade-moodys-20121012,0,5203322.story

Pennsylvania Dropped A Notch By Credit-Rating Agency

The New York-based credit ratings agency Moody’s Investors Service has slapped a lower rating on Pennsylvania‘s debt as state budgetmakers face spiraling public pension costs.

Monday’s downgrade means Pennsylvania is now closer to the bottom of Moody’s ratings for the 47 states with general obligation debt.

Thirty states still have ratings of Aaa or Aa1, while Pennsylvania joins 16 other states with an Aa2 rating or below.  Moody’s had boosted Pennsylvania’s rating to Aa1 in 2010.

Read more: http://lancasteronline.com/article/ap/689214_Pa–dropped-a-notch-by-credit-rating-agency.html#ixzz20pkx2F2i

Moody’s Withdraws Lackawanna County’s Bond Rating

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More than six months after Lackawanna County asked Moody’s Investors Service to withdraw its bond rating, the rating agency has complied.

It is what happened in the interim that the county hoped to avoid.

In the past 12 weeks, the county has borrowed $21 million to clear its books of unfunded debt, including repayment of last year’s tax anticipation loan; increased property taxes 38 percent to balance its 2012 budget; and completed the overdue audit of its 2010 finances.

But all of that financial housekeeping came too late for Moody’s, which quietly withdrew its rating on the county’s $202.7 million in outstanding general obligation bonds two weeks ago after downgrading the debt to the equivalent of junk status back in September.

Read more: http://thetimes-tribune.com/news/moody-s-withdraws-lackawanna-county-s-bond-rating-1.1270446#ixzz1m6HXW5GI

Moody’s Investors Service Reviewing Penn State Bond Rating For Possible Downgrade

More bad news for Happy Valley!

Due to the charges against Jerry Sandusky, a major credit agency is reviewing Penn State’s Aa1 bond rating for a possible downgrade.  Moody’s Investors Service stated on Friday they have put Penn State’s bond rating under review due to the damage of the university’s reputation by the child sexual abuse scandal.

Moody’s will assess things like lawsuits brought against the university, enrollment decline, loss of donations and any change in the university’s status with the Commonwealth of Pennsylvania.

Needless to say, this action could negatively impact Penn State and the university’s ability to recover from the scandal.  Penn State is a major employer in Pennsylvania.  According to Wikipedia,”The university is now the largest in Pennsylvania, and in 2003, it was credited with having the second-largest impact on the state economy of any organization, generating an economic effect of over $17 billion on a budget of $2.5 billion.”