Westchester County is among 162 governments in 31 states that Moody’s Investors Service is considering downgrading its Aaa bond rating if the federal government doesn’t reach a deal on the debt ceiling.
Moodys last night announced that governments such as Westchester with “high economic dependence on federal activity, would be vulnerable” if the U.S. government gets its rating lowered.
Westchester County spokesman Ned McCormack said this step by Moodys “is the result of Washington’s inability to resolve the debt ceiling issue and underscores the need for timely action by national lawmakers.”
“Our hope is that a debt ceiling agreement will be reached before this action by Moody’s has a negative impact on Westchester County’s Aaa rating and borrowing costs,” he said.
Though Westchester is the only entity in New York, others include Bergen, Monmouth, Morris and Union counties in New Jersey while Fairfield, Greenwich, Ridgefield, New Canaan are among towns and cities in Connecticut that could be downgraded.
If the federal government were to default, these governments would then be placed under review, which would take approximately 90 days to complete, Moodys said today.
Some 400 other Aaa public agencies were not put on review for possible downgrades because Moodys considers their ratings to be “resilient to a one-notch downgrade” of the federal government.
Moodys earlier in the week lowered Westchester’s outlook to negative from stable, but the county retained its Aaa rating from all three agencies — including Fitch and Standard & Poors.
The changed outlook basically means the agency is telling Westchester that it’s straddling a line that could jeopardize its financial footing — and Aaa rating.
If Westchester was downgraded, it would have to pay more for borrowing.