Projo Biz Blog

Standard & Poor’s Ratings Services has revised the outlook on the general obligation bonds issued by East Providence to negative from stable. Standard & Poor’s also affirmed the ’A-’ underlying rating on the debt.

"The outlook revision was based on potential pressures on the city’s general fund balance resulting from the projected fiscal 2008 financial results of the school fund," said Standard & Poor’s credit analyst Henry Henderson.

The negative outlook reflects the weak finances of East Providence’s school fund and the potential impact this could have on the city’s already-thin general fund balance. While management has identified two potential solutions for the school fund’s large projected fiscal 2008 drawdown, neither solution can be implemented unilaterally.

If there is a resolution with respect to the projected school fund deficit, Standard & Poor’s could revise the outlook back to stable.
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