Moody's Investors Service has slightly downgraded Oakdale's Sewer Enterprise Revenue bond rating, citing concerns about the city's lagging economy and uncertainty of future financial performance.
The bond rating of A3 rating was dropped to Baa1on Wednesday, May 23.
According to Moody’s, the action reflects the sewer enterprises financial performance which has performed below expectations. The rating also takes into account state loans which will begin to create pressure on operations and possible customer resistance to another substantial rate increase which may be needed to bolster operations.
A Baa1 rating means the city has an “adequate capacity” to meet its financial commitments but is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligors in higher-rated categories.
The previous A3 rating defined Oakdale as having a “strong capacity” to meet financial obligations. A bond is considered “investment grade” if its credit rating is Baa3 or higher.
Look to the May 30 edition of The Oakdale Leader for more of this story.