MOODY'S DOWNGRADES THE BOROUGH OF HALEDON (NJ) G.O. RATING TO Baa2 FROM A3

Posted on: December 22, 2009, 4:59 pm

NEW YORK, Dec 22, 2009 -- Moody's Investors Service has downgraded the Borough of Haledon's (NJ) long-term rating to Baa2 from A3 affecting $4.5 million in outstanding general obligation debt, secured by the borough's general obligation, unlimited tax pledge. The downgrade reflects significant deterioration of the borough's financial position - evident in fiscal 2008 Current Fund balance ending at $65,000, a minimal 0.73% of Current Fund revenues, reliance on non-recurring budget relief solutions, including the deferral of pension payments in 2009, and a decline in the borough's tax base. The Baa1 rating additionally reflects the expectation that the borough's modest $684 million tax base located in Passaic County (G.O, rated A3/stable) will continue to decline, with wealth indices remaining below state and national medians, and average debt burden that is expected to remain manageable. The borough has not been immune to the national housing downturn, and has seen its largely residential tax base decline by 5.7% in fiscal 2010. The rating also reflects the borough's average debt burden (1.2% direct; 2.2% overall), which is expected to remain average given the lack of major borrowing plans and rapid amortization of principal (87.9% repaid in 10 years). All of the borough's debt is fixed rate and the borough is not party to any derivative agreements...

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