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Wausau (City of) WI -- Moody's assigns Aa3 to Wausau, WI's GO notes and refunding bonds

·12 mins read

Rating Action: Moody's assigns Aa3 to Wausau, WI's GO notes and refunding bonds

Global Credit Research - 20 Aug 2020

New York, August 20, 2020 -- Moody's Investors Service has assigned a Aa3 rating to the City of Wausau, WI's $5.4 million General Obligation Promissory Notes, Series 2020D and $6.7 million Taxable General Obligation Refunding Bonds, Series 2020E. We also maintain Aa3 ratings on the city's outstanding general obligation unlimited tax (GOULT) debt and MIG 1 on its note anticipation notes. Inclusive of the current offerings, the city has $68.6 million in outstanding GOULT debt and $8 million taxable note anticipation notes rated by Moody's.

RATINGS RATIONALE

The Aa3 GOULT rating reflects its role as a regional economic hub in northcentral Wisconsin (Aa1 stable) and its moderately sized, growing tax base. The city's reserves and liquidity are healthy despite utilizing funds in previous years to support tax increment district (TID) development. In addition, the debt and pension liabilities are manageable. The city's primary challenges are a below average resident wealth profile, and extensive TID activity that could pose operational pressure on the city's finances if their associated assessed valuations depreciated.

We regard the coronavirus outbreak as a social risk under our ESG framework, given the substantial implications for public health and safety. The coronavirus crisis is not a key driver for this rating action. We do not see any material immediate credit risks for the City of Wausau. However, the situation surrounding Coronavirus is rapidly evolving and the longer term impact will depend on both the severity and duration of the crisis. If our view of the credit quality of Wausau changes, we will update the rating and/or outlook at that time.

RATING OUTLOOK

Outlooks are generally not assigned to local governments with this amount of debt.

FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS

- Substantial reduction in the debt burden

- Material growth in resident incomes

- Sustained growth in operating reserves and liquidity

FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS

- Declines in available fund balance or liquidity

- Significantly increased debt or pension burdens

- Tax base deterioration

LEGAL SECURITY

All of the city's GOULT debt, including the current bonds, is secured by its full faith and credit GOULT pledge which benefits from a dedicated property tax levy not limited by rate or amount.

USE OF PROCEEDS

The proceeds of the 2020D notes will finance the cost of various capital projects, including projects in the city's TIDs. The proceeds of the 2020E refunding bonds will be used to take out the city's Taxable Note Anticipation Notes, Series 2017E.

PROFILE

The City of Wausau encompasses 20 square miles and serves as the county seat of Marathon County (Aa1), in northcentral Wisconsin (Aa1 stable). The city provides a full range of municipal services, including public safety, public works and municipal utilities, to an estimated population of 38,800.

METHODOLOGY

The principal methodology used in these ratings was US Local Government General Obligation Debt published in July 2020 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1230443. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.

For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1133569.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Katie Anthony Lead Analyst Regional PFG Chicago Moody's Investors Service, Inc. 100 N Riverside Plaza Suite 2220 Chicago 60606 US JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Eric Harper Additional Contact Regional PFG Chicago JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Releasing Office: Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653

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