RPT-Ratings cut for nearly $212 mln of Tacoma, Wash., bonds
SAN FRANCISCO, July 9 (Reuters) - Fitch Ratings on Monday downgraded nearly $212 million of Tacoma, Washington, general obligation bonds, citing a sharp drop in reserves and the city's limited progress in tackling recurring deficits.
"Tacoma's general fund operations have experienced four consecutive years of operating deficits and appear likely to face additional pressure over the next several years," Fitch said in a statement.
Fitch said it lowered $23.5 million of Tacoma's unlimited tax general obligation bonds to 'A+' from 'AA' and downgraded $188.2 million of the city's limited tax general obligation bonds downgraded to 'A' from 'AA-'.
Fitch also said it assigned a negative outlook to the debt, reflecting "concern that actions necessary to restore balance to general fund operations will likely require politically difficult service reductions, use of general fund balance, or both."
The rating agency affirmed its 'A+' rating on $28.1 million of Tacoma's convention center and parking revenue bonds, and revised the outlook on the debt to negative from stable.
"Coverage for the revenue bonds remains satisfactory though slightly more pressured given the city's recent debt restructuring, which results in an escalation of annual servicing costs over the next several years," Fitch said.
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