NEW YORK, July 9 (Reuters) - The credit rating of Burlington, Vermont was cut to A2 from Aa3, Moody's Investors Service said on Friday, partly because of the city's difficulties with its telecommunications enterprise.
Burlington pays in part for the expansion of its telecommunications system with its pooled cash account.
'Despite the city's efforts, the telecommunications system has been unsuccessful at generating the cash flows necessary to self-fund its operating, capital and debt expenses or to achieve a realistic refinancing plan to repay the interfund loan due to the pooled cash account,' Moody's said in a statement.
The downgrade affects about $87 million of outstanding parity debt that is backed by a general obligation unlimited tax pledge, Moody's said.
Burlington remained on negative outlook, which means its credit rating could be cut further over the near term.
(Reporting by Joan Gralla; Editing by Andrew Hay) Keywords: VERMONT BURLINGTON/ (Reuters Messaging: joan.gralla.reuters.com@reuters.net; +1-646-223-6300 ) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Burlington pays in part for the expansion of its telecommunications system with its pooled cash account.
'Despite the city's efforts, the telecommunications system has been unsuccessful at generating the cash flows necessary to self-fund its operating, capital and debt expenses or to achieve a realistic refinancing plan to repay the interfund loan due to the pooled cash account,' Moody's said in a statement.
The downgrade affects about $87 million of outstanding parity debt that is backed by a general obligation unlimited tax pledge, Moody's said.
Burlington remained on negative outlook, which means its credit rating could be cut further over the near term.
(Reporting by Joan Gralla; Editing by Andrew Hay) Keywords: VERMONT BURLINGTON/ (Reuters Messaging: joan.gralla.reuters.com@reuters.net; +1-646-223-6300 ) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.