Moody's Investors Service said it has downgraded to Aa3 from Aa2 the rating on Town of Hempstead, N.Y.'s outstanding limited tax general obligations, affecting $335 million in outstanding debt.
The outlook has been revised to stable.
The downgrade reflects the material deterioration of the town's finances over a multi-year period that has led to a significant narrowing of available fund balance position.
The rating also reflects the town's proximity to the New York City (Aa2 STA), its notably large tax base with above average socioeconomic indicators, as well as its modest debt and pension burden, Moody's said.
The rating further incorporates the recently improved balance between recurring revenues and recurring expenses and the expectation that such balance is sustainable.
