* * * Updated below with the official Moody's rating downgrade * * *
Burlington Mayor Bob Kiss announced late Monday that Moody’s Investors Services had downgraded the city's general obligation credit rating two notches from Aa3 to A2, and placed the Queen City on a negative credit watch.
Moody’s will again review the city’s credit within the next 90 days, Kiss told the Burlington City Council at its regular meeting Monday night.
A report and analysis relative to the downgrade will be issued by Moody’s on Tuesday.
Kiss told the council that city officials were told the downgrade resulted from uncertainty around Burlington Telecom’s outstanding $16.9M debit to the city’s pooled cash account. The ability of BT to repay the debit is at risk due to BT’s current financial status. If BT cannot repay the $16.9M, then the city may face longer term cash flow challenges.