Fitch downgrades Manchester bond rating

Fitch Ratings has lowered the ratings on the city of Manchester’s general obligation bonds. The bond rating agency downgraded the bonds from AAA, or “prime maximum safety,” to AA+, or “high grade, high quality,” and gave the city a “stable” rating outlook. Fitch analysts said they made the move because the city didn’t shore up its debt reserves. “The downgrade reflects the city’s decision not to appropriate additional monies to cover a shortfall in debt service payments on the city’s housing and redevelopment authority’s bonds which resulted from lower state distributions of meals and room taxes,” said Fitch. “Although the city is not legally obligated to fund the shortfall, this decision is not consistent with an entity Fitch rates at the highest level.” But Fitch did cite Manchester’s continuing move toward diversifying its economy away from manufacturing and its historically strong financial position. “The lack of a formal capital improvement plan is offset by the city’s manageable future capital needs, above-average amortization and prudent debt management policies,” said Fitch. – CINDY KIBBE/NEW HAMPSHIRE BUSINESS REVIEW