Princeton Township’s triple-A bond rating, said Chief Financial Officer Kathryn Monzo, will be not be affected by Moody’s Investor’s Service recent downgrading of Ewing Township’s bond services. In a December 23 report that described over-reliance on surplus money, Moody’s cut Ewing’s rating from A1 to A2.
“It will have no bearing on Princeton Township,” said Ms. Monzo, citing the success of a recent bond sale as evidence of the Township’s fiscal strength. “We have our own financial situation and different ways of doing things,” she added. The future looks “stable,” she reported, and consolidation promises to be a fiscal plus.
Moody’s Investors Service is a leading provider of credit ratings, research, and risk analysis. The firm’s ratings and analysis track debt covering more than 110 countries, 12,000 corporate issuers, 25,000 public finance issuers, and 106,000 structured finance obligations. Princeton’s triple-A rating is the highest that Moody ever assigns; its system follows the pattern Aaa, Aa, A, Baa, Ba, B, Caa, Ca. and C. Numerical modifiers 1, 2, and 3 are appended to each generic rating classification from Aa through Caa. Low bond ratings for municipalities usually result in higher interest rates on borrowing or issuing bonds, because the cities are perceived to be at greater risk of default.
Ewing was not the only New Jersey city to be downgraded in Moody’s recent report. Passaic received a similar demotion, going from A2 to A1 based on dwindling amounts of reserve cash. Jackson also went down a notch, from Aa2 to Aa3. The downgrades occurred despite the recent announcement that there would be a new infusion of $139 million in state aid to New Jersey cities.
Ms. Monzo spoke at last week’s Township Committee meeting, which was noteworthy for its day and time — Wednesday at 10 a.m. — and for its brevity. The three members who were present, Mayor Chad Goerner, Deputy Mayor Sue Nemeth, and Bernie Miller, approved a “consent agenda” of items that are typically described as “housekeeping.”
The Township’s reorganization meeting was scheduled for Tuesday evening, January 3, after press time.