NEW: Fitch Rates Providence Bonds at “BBB”, Gives City Negative Outlook
Friday, February 15, 2013
While Mayor Angel Taveras says he believes “Providence is “recovering”, Fitch Ratings has a slightly less than optimistic outlook on the city and has just ranked Providence’s general obligation bonds as “BBB” and given a negative rating outlook because the city faces financial pressure and has “limited flexibility.”
The bonds, which the city plans to use proceeds for improvements to roads, are set to price via negotiation during the first week of March.
Fitch also affirmed its “BBB” rating on the four of the city’s outstanding bonds, including the $1.9 million GO bonds, series 2000, the $11.1 million GO bonds, series 2001B, the $19.1 million GO refunding bonds, series 2004A and the $6.9 million GO taxable refunding bonds, series 2004B.
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Fitch said the key drivers of its rating were that the city’s financial condition was still pressured, it’s liquidity has improved but is still limited, it has high future retiree costs and, though there is an effective management team in place, the agency notes there are “weak demographics” and an overall financial condition that is “still weak.”
