Moody's report: If Springfield doesn't change, credit rating will be downgraded

Moody’s Investors Service issued a report Thursday maintaining the city of Springfield’s and City Water, Light and Power’s water fund’s downgraded credit ratings, though the agency revised both of the ratings’ outlooks from stable to negative.

“The outlook means we believe that if the city keeps going in the same direction, it will get downgraded,” said Moody’s spokesman David Jacobson. A negative outlook could mean a downgrade within 12 months to two years, according to the report.

Citing growing pension liabilities, Moody’s downgraded Springfield’s credit rating two notches (from A1 to A3) and the water fund’s rating (from Aa2 to A1) in October 2016. An A3 rating ranks seventh on a scale of 21 possible ratings, Jacobson said, indicating Springfield can pay its debts.

A better credit rating leads to lower costs when borrowing.

Three main factors contributed to the city staying at A3, but having a negative outlook: a growing unfunded pension liability, high retiree benefit burdens and weak revenue growth.

Read more: http://www.sj-r.com/news/20180111/moodys-report-if-springfield-doesnt-change-credit-rating-will-be-downgraded