Moody’s Investment Services reaffirmed today that as states and communities move into the clean-up and rebuilding phase after superstorm Sandy it is unlikely that any further communities ravaged by the storm will face a credit downgrade.
“We believe the sector as a whole will manage well through the storm’s short- and long-term effects,” says Geordie Thompson, a Moody’s Vice President and Senior Credit Officer. “Other than those we have already taken, we anticipate few ratings to change as a result of the storm.”
Moody’s has only downgraded one issuer – the borough of Seaside Heights – as a result of the storm and has revised the outlooks on four others – Belmar, Lavalette, Long Beach and Sea Bright – to negative.
Three other New Jersey issuers – Union Beach, N.J., and two revenue bonds from the N.J. Casino Reinvestment Development Authority – are under review for potential downgrade.
According to the report, capital markets have remained accessible to even states and communities hit hardest by the storm.
The agency did warn that delays in FEMA reimbursements and the destruction of property tax bases in the shore communities may put pressure on those issuers in the medium term but is unlikely to result in any action by Moody’s.