Moody's Investors Service revised its outlook on Burlington, Vt.'s Baa3 general obligation rating to stable from negative April 14. The stable outlook also applies to Moody's outstanding essential certificates of participation Ba1 rating and to nonessential certificates of participation (parking) Ba2 rating.
The rating action affects $102.8 million in GO debt, $1.9 million in essential COPS, and $7.1 million in non-essential COPs.
The Baa3 rating "reflects the city's strained financial position given the significant advances to other funds from the general fund prior to fiscal 2012," said Moody's analyst Nicholas Lehman and vice president Malcolm Thompson.
The rating also reflects the city's status as the economic center of Vermont and its manageable debt burden, Lehman and Thompson said.
The stable outlook reflects a stabilization of the general fund and the city leadership's commitment to addressing the fund's negative unassigned balance. The outlook also stems from a pending settlement with Citibank over its suit against the city concerning Burlington Telecom. If the Vermont Public Service Board approves the settlement, it will sharply limit the general fund's liability, the analysts said.
