East Providence's Bond Rating Downgraded

The Moody's Corporation has downgraded the City of East Providence's bond rating to BAA1, a negative outlook. City Finance Director Ellen Eggeman informed East Providence Patch of the downgrade in an e-mail Thursday morning, one day after the City Council and School Committee to discuss the city's $6.3 million defict.

During Wednesday afternoon's meeting, Eggeman alerted members of both committees that Moody's would be issuing a bond rating "by close of business" that day. Eggeman went on to say that the rating would "impact [the city's] borrowing capacity" and that a significant downgrade would mean the city "may not have options." Specifically, she worried that a downgraded bond rating would make it difficult for the city to find a lender.

Councilman At-Large William Conley also speculated what a downgrade could mean for the city's ability to carry out its already planned bond-funded projects. On the issue of the school department's large-scale , which is partly funded through voter-approved Asset Protection Bonds, Conley said the issue is not matter of how expensive a project like the department's would be, but rather an issue of "assuming you can get there."

Conley added, "If there's a reluctance to do even the short-term borrowing, it would [be] really difficult to jump into the bond market for all the same reasons."