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UPDATE 1-Moody's cuts Suffolk County, N.Y.'s GO rating to A2
May 30, 2013 / 7:18 PM / 4 years ago

UPDATE 1-Moody's cuts Suffolk County, N.Y.'s GO rating to A2

NEW YORK, May 30 (Reuters) - Moody's Investors Service on
Thursday cut Suffolk County, N.Y.'s general obligation rating to
A2 from A1, affecting $1.4 billion of outstanding debt. The
rating outlook remains negative. 
    Moody's cited Suffolk's failure to meet projected fiscal
2012 year-end estimates and its use of non-recurring revenue
adjustments to balance the fiscal 2013 budget as the reasons for
the downgrade.
    The rating could be lowered again if the county fails to
meet projections in fiscal 2013 and eliminate accumulated
deficits in fiscal 2014, Moody's said.
    The wealthy county on Long Island to the east of New York
City has a population of 1.5 million and a median household
income of about $87,000, compared to $57,000 for the rest of the
state.
    Suffolk, which includes the posh Hamptons beaches, declared
a fiscal emergency in March 2012 after an independent task force
predicted a 3-year deficit of $530 million.
    Fitch Ratings downgraded the county's GO debt to A from
A-plus on March 25 because of concerns about the county's
ability to become financially stable, let alone reduce its big
deficit.
    Moody's said its outlook reflects a cumulative operating
deficit of $530 million from fiscal year 2011 through 2013. That
shortfall was driven by aggressive assumptions about sales tax
collections and a failure to cut spending, the Wall Street
credit rating agency said.
    "While the county has made significant steps toward
mitigating the deficit since identifying it in March, future
rating reviews will consider the county's ability to make
further headway in reducing the structural gap and achieve
structurally balanced operations," Moody's said.

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