Summary: Methuen, Massachusetts; General Obligation; Non-School State Programs

S&P Global Ratings placed its 'AA-' long-term rating on Methuen, Mass.' outstanding general obligation (GO) debt on CreditWatch with negative implications. The CreditWatch action reflects our view that there is at least a one-in-two chance that we may lower the rating on Methuen's outstanding bonds within the next 90 days due to the city's potentially deteriorated financial position. There have been recent discussions at city council meetings about budgetary imbalances and the potential need to seek state approval to issue deficit-financing notes to cover the shortfall. Reportedly, the imbalance stems from expenditures exceeding revenues in the school department, and projections for rapidly increasing personnel costs for active police department personnel. Over the next 90 days, we will evaluate and determine

...S&P Global Ratings placed its '##-' long-term rating on Methuen, Mass.' outstanding general obligation (GO) debt on CreditWatch with negative implications. The CreditWatch action reflects our view that there is at least a one-in-two chance that we may lower the rating on Methuen's outstanding bonds within the next 90 days due to the city's potentially deteriorated financial position. There have been recent discussions at city council meetings about budgetary imbalances and the potential need to seek state approval to issue deficit-financing notes to cover the shortfall. Reportedly, the imbalance stems from expenditures exceeding revenues in the school department, and projections for rapidly increasing personnel costs for active police department personnel. Over the next 90 days, we will evaluate and determine whether management has a credible plan to align revenues to expenditures. Our review could result in a downgrade, possibly by multiple notches, depending on the degree of the financial...

Summary