Bad news for Woonsocket residents; Moody's Investors Services has downgraded the fiscally struggling city's bond rating from B2 to B3.
On Monday the rating agency indicated that the city had a very high unfunded pension liability and is grappling with a debt burden to the tune of $214 million. Worse, according to the investor, it is unclear if the city will be able to make it's next debt payment on July 15 without the help of state aid.
Without the help of state aid the investor said that Woonsocket faces a "near-term liquidity strain."
The bond agency said that Woonsocket needs to address the very large unfunded pension liability and reduce dependence on state aid in order to improve the city's rating. A B3 bond rating means the city's ability to pay back bonds is highly speculative and the city is vulnerable. Adverse economic factors could cause the city to be unable to meet its debt obligation. The rating is just four notches above a "C" the typical rating for an entity that is in bankruptcy proceedings.