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Moody's drops Babylon Village's A1 rating
Moody’s Investors Service last week withdrew its A1 rating for Babylon Village. The agency said officials failed to provide financial information necessary to evaluate the village’s financial condition.
“As a result, Moody’s believes that it is unable to provide investors with an informed assessment of the current credit quality of this debt instrument,” the ratings agency said in a release July 20. The move came more than a month after the agency placed the village “on review” for the same reason.
A credit rating is an estimation of the issuer’s risk of default. The A1 designation denotes “superior credit quality,” according to the agency. A ratings withdrawal that stays in place could make it hard or more expensive for the village to borrow money in the future.
Village officials downplayed the move by the ratings agency, saying the needed information -- a projection of insurance benefits for potentially retiring village employees in the coming year -- would be supplied shortly and that the overall financial health of the village was good.
“Our revenue is good, we have a lot in our fund balance that we didn’t have before, and we’re taking in more money from tickets,” Mayor Ralph Scordino said in an interview Monday.
But, he said, the volume of documentation demanded by both ratings agencies and county, state and federal governments is a challenge for a small village run by a small staff.
“We don’t have 100 people working in our offices,” he said.
Babylon Village carries $5.2 million in debt, according to Moody’s.