Oct 24 (Reuters) - Moody's Investors Service late onWednesday said it raised East Providence, Rhode Island's generalobligation bond rating by one notch to Baa3 from Ba1, bringingthe rating back into investment grade territory.
The outlook was also revised to positive from stable.
The upgrade to investment grade reflects the city's improvedfinancial position, after the dissolution of the state appointedbudget commission, the rating agency said in a statement.
In addition, the new rating reflects the city's increasedreserve levels, improved cash flow and implementation ofpolicies to ensure fiscal stability.
East Providence has also reduced the unfunded liability inits self-administered pension plan after a one-time infusion ofproceeds from the city's share of a $500 million nationwidesettlement Google Inc. paid to resolve U.S. Department ofJustice charges it allowed Canadian pharmaceutical companiesimproperly to target U.S. consumers with online ads.
The city, along with most Rhode Island local governments,has struggled with its pension funding in recent years.
Moody's said the city's financial position will likelycontinue to improve over the near term, as it addresses thelong-term liabilities for pensions and retiree healthcare andother benefits, which has resulted in a positive outlook.
Earlier this month, Standard & Poor's Ratings Service alsoraised the city's GO rating, by five notches to A from BB-plus,citing the rating agency's revised local GO criteria, the city'simproving finances, and East Providence's lower long-termpension liabilities.
- Security Upgrades & Downgrades
- Investment & Company Information