WILKES-BARRE — Standard and Poor’s has downgraded the City of Wilkes-Barre’s credit rating three notches and gave the city a “negative outlook” because of a poor cash flow and structural imbalance. The rating dropped from “A-” to “BBB” on the city’s general obligation bonds, S&P Global Ratings said in a news release dated Friday. S&P also lowered the rating of the city’s series 2008C variable-rate demand bonds, which are supported by a PNC Bank letter of credit, to “A/A-1” from “AA/A-1.” “The lowering of the underlying rating reflects our view of the city’s weakened general fund budgetary performance and flexibility, which is due to ongoing structural imbalances and limited revenue-raising flexibility,” S&P Global Ratings credit analyst Moreen Skyers-Gibbs said in the news release. “It also reflects the city’s constrained and weakened liquidity profile, which has increased its dependency on cash flow borrowing, and that is expected to continue over the two-year outlook period,” Skyers Gibbs said. The negative outlook reflects S&P’s opinion there is a one-in-three chance the company could lower the rating further within one year should the city’s cash flow or budgetary flexibility further weaken, the company said. “It also reflects our views of the uncertainty of the city’s ability to achieve and sustain structurally balanced operations given its limited tax base, weak economy, and growing fixed costs.
Wilkes-barre Credit Rating Downgraded Because Of Poor Cash Flow
timesleader, The Times Leader
Mon, 05/22/2017 - 7:09pm
Sections: u.s.
Topics: Pennsylvania Luzerne County Wilkes-Barre
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