S&P: Huntington Municipal Development Authority, WV Rating Outlook Revised To Negative On Weakened Economy, Pension Pressure
The rating action reflects S&P Global Ratings' opinion of the city's weakened economy score and continued pension pressure.
At the same time, the rating service affirmed its 'A' rating on the authority's debt, supported by the city.
"We believe Huntington's pension costs could continue to put significant pressure on the city's budgetary flexibility and liquidity, which leads us to believe there is at least a one-in-three chance we could lower the rating over the outlook's two-year period," said S&P Global Ratings credit analyst Michael Mooney. "If financial performance were to weaken, resulting in diminished liquidity or flexibility, we could lower the rating. However, if measures the city has taken lead to it returning to balanced operations, and if the city can sustain higher liquidity and budgetary flexibility, we could revise the outlook to stable."
Revenue bonds represent an interest in lease payments made by Huntington, as lessee, to the authority, as lessor.