Moody’s Investors Service announced Tuesday that Long Beach is no longer in danger of a downgrade that would relegate its bond rating to junk status.
The service — which downgraded the cash-strapped city’s rating to Baa3 from A1 in December — released a statement that Long Beach is “no longer under review for downgrade.”
Long Beach’s passage of a “more conservative” $88 million 2012-13 budget last month was a key factor in the service’s decision not to further lower the city’s rating, the statement said. Another downgrade would have placed the city’s rating below investment grade.
Moody’s statement described the city’s financial outlook as “negative,” but added that implementation of cost controls could reverse that.
The city recently passed a plan to pay down a $10.25 million deficit over 10 years.
Jack Schnirman, Long Beach’s city manager, described the Moody’s announcement as welcome news.
“We’ve stopped the bleeding,” he said in a statement.
Above: Long Beach City Hall