The City of Butler’s General Obligation Credit Rating has once again been downgraded by S&P Global Ratings.
The lowering of ratings on two general obligation 2015 bonds four notches from BB+ to B was made as a result of a “lack of management” and limited liquidity to cover liabilities. The city also remains on a negative credit watch.
The liability determined to be most concerning is the city’s guarantee of a $2 million loan from PNC Bank in connection with the Centre City hotel project. Art Cordwell with the Butler City Redevelopment Authority told our newsroom the bank will hold off expecting payment until the sale of the hotel which is expected to be completed January 6th. Funding from state grants will not be released until after the long delayed project is completed.
The city received two previous notifications in June and October of similar downgradings of credit rating by S&P a total of five notches from A to BB+.
Written by Ryan Saeler