Moody's downgrades Inglewood, Calif., says budget cuts needed
SAN FRANCISCO Dec 14 (Reuters) - Moody's Investors Service downgraded approximately $90 million of Inglewood, California's bonds on Friday, citing challenges the Los Angeles-area city faces in balancing its budget.
The ratings agency also said it is concerned about Inglewood's "relatively high" debt level and its "chronically high" unemployment rate.
"General Fund operations are out of balance and a significant amount of additional cuts are needed to restore balance," Moody's said in a statement.
"Absent such cuts, the city will continue to struggle to balance its budgets for the near term," Moody's said.
Moody's lowered its rating on Inglewood's lease revenue bonds Series 2012 to 'Baa2' from 'Baa1,' and downgraded the city's pension obligation bonds, 2005 Series A and Series B, to 'Baa2' from 'A3.'
The downgrades affect $31 million in lease-supported obligations and approximately $59 million in pension obligation bonds, Moody's said.
"The relative size and diversity of the city's tax base and the city's key location in the heart of Los Angeles area economy are the credit strengths underlying these ratings," Moody's said, adding that Inglewood has made "measurable gains in income levels relative to other cities in the state and the nation according to the 2010 census results."