Wednesday, November 18, 2015

Moody's downgrades several issues of Jackson bonds

Moody's Investor Service issued the following statement yesterday:

Moody's downgrades to A3 the City of Jackson, MS's GOULT debt; outlook revised to negative

Downgrades General Fund unconditional pledge to Baa1; assigns A3 to $19.3M Series 2015 A & B GOULT

Issue: General Obligation Refunding Bonds, Series 2015A; Rating: A3; Sale Amount: $19,125,000 Expected Sale Date: 12/01/2015; Rating Description: General Obligation

Issue: Taxable General Obligation Refunding Bonds, Series 2015B; Rating: A3; Sale Amount: $175,000; Expected Sale Date: 12/01/2015; Rating Description: General Obligation


Moody's Investors Service has downgraded to A3 from Aa2 the City of Jackson, MS's general obligation unlimited tax bonds, and assigned an A3 rating to $19.125 million General Obligation Refunding Bonds, Series 2015A and $175,000 Taxable General Obligation Refunding Bonds, Series 2015B. Post sale, Moody's will rate $128.4 million of the city's outstanding general obligation unlimited tax debt. Concurrently, Moody's has also downgraded to Baa1 from Aa3 $8.6 million in outstanding Series 2011 A and B bonds, backed by an unconditional pledge of the city's general fund. The outlook has been revised to negative.
 (Moody's downgraded this issue by four levels.)


The downgrade reflects the city's deteriorating financial position resulting from significant operating deficit in fiscal 2014 expected to persist through fiscal 2016. The city estimates that for fiscal 2015, which ended September 30, 2015, General Fund reserves declined by nearly 60% compared to audited fiscal 2014 reserves. The decline represents a departure from the city's prior financial performance and stems from inadequate revenues, despite significant legal flexibility to increase property tax rates. The downgrade also reflects the city's recent debt restructuring to balance the fiscal 2016 operating budget. Although the city's general obligation debt is secured by an unlimited ad valorem tax pledge, city officials did not raise property taxes but rather utilized the restructuring to extend the repayment on certain principal maturities to fiscal 2020-2036 from 2016-2019.

The A3 GOULT rating also reflects adverse socioeconomic trends, including population outmigration, declining wealth levels, and high poverty rate. The rating further considers the city's sizeable tax base and elevated debt and pension burdens, with significant infrastructure needs that will require substantial capital investment over the next fifteen years.

The Baa1 rating on the city's outstanding Series 2011A and 2011B bonds reflects the more limited source of repayment for the bonds, which are secured by an unconditional and irrevocable appropriation pledge of the city's general fund.


The negative outlook reflects the potential for further deterioration of the city's financial position given the budgeted fiscal 2016 deficit. It also incorporates the lack of clarity regarding resources to close the expected budget gaps, which could potentially erode all available reserves. Future reviews will focus on management's ability to balance the budget and generate sufficient revenues to improve the balance sheet.

WHAT COULD MAKE THE RATING GO UP (remove negative outlook)

• Established trend of structurally balanced operations
• Rebuilding of reserves to adequate levels
• Substantial tax base growth
• Significant improvement in socioeconomic indices


• Further financial deterioration beyond what the city currently estimates for fiscal 2015
• Continued reliance on one-time measures and debt restructuring to balance future budgets
• Deterioration of local economic conditions that result in further revenue declines


City of Jackson is located in central Mississippi and is the county seat for Hinds County (Aa2).


The general obligation bonds are secured by an annual ad valorem tax, levied against all taxable property in the city without legal limitation as to rate or amount.

Series 2011 A and B bonds are an unconditional, irrevocable obligation of the city's General Fund per a contribution agreement with the Jackson Redevelopment Authority.


Proceeds of the Series 2015 bonds will be used to refinance and restructure a portion of the city's outstanding debt. The bonds are being issued to achieve debt service savings of approximately $16 million over fiscal years 2016-2019, while at the same time extending the final maturity to 2036 from 2019. The transaction is expected to result in a net present value loss of approximately $1 million....


Anonymous said...

Well, the wide-eyed Pollyannas in don't recognize that the ship is sinking but you can't fool the green eye-shade wearers at Moody's.

Let the delusional rationalizations from the Whole Foods crowd commence (especially that Detroit booster from earlier today)

Anonymous said...

Boy howdee....the haters gonna love this news!

Anonymous said...

### Metro Ad Valorem Millage Rates (2013-2014) ###

Jackson = 178.80 mils

Edwards = 150.33 mils

Clinton = 147.76 mils
Canton = 144.84 mils

Bolton = 139.63 mils
Byram = 137.43 mils
Terry = 131.18 mils

---> AVERAGE = 131.0625 mils <---

Raymond = 128.95 mils
Pearl = 128.18 mils
Flora = 126.18 mils
Madison = 121.48 mils

Brandon = 118.66 mils
Ridgeland = 112.70 mils
Florence = 112.56 mils

Flowood = 109.66 mils
Richland = 108.66 mils

*INCLUDES City, County & School District

Anonymous said...

Is it hateful to point out reality?

If you get cancer and the doctor tells you the the doctor hateful?

Fact is that this city cannot cut spending enough and raise taxes enough to run the place as it currently exists....much less with the needed improvements to the infrastructure.

So when the same dude who helped Detroit file bankruptcy shows not be he can say he hates....but he is still gonna have to take the city finances over nonetheless.

Kingfish said...

Two golf courses. Have to keep them. Planetarium. Won't give it to the state. Municipal Art Gallery and Mynelle Gardens. Keep them on the books too.

They don't want to cut anything or sell anything or shut anything down.

Longtime Jackson Resident said...

I have been a Jackson resident since 1955, but I gave up about a year ago. My house is for sale, but, alas, no buyers. I wish Jeff Good and his band of merry Fondren lovers well, but the reality is that Jackson is sunk. The financial markets are telling us that homegrown hopes and wishes are pie in the sky. I am afraid Jackson has sunk below the level of any hope of a comeback. The Moody analysis seems to prove that. It's time to pull the plug. Jackson's tax base is so low it can't even think about clawing back.

Anonymous said...

Was it over when the Germans bombed Pearl Harbor??? Hell no!!!

Anonymous said...

They don't want to cut anything or sell anything or shut anything down.

[And] their herd of lactating cash cows keeps shrinking, and shrinking, and shrinking.

Anonymous said...

5:51 Maybe your house just sucks.

Anonymous said...

5:51 you are a liar. God is watching you. You don't live here, and never have.

Anonymous said...

7:58, maybe, er, highly likely that supply dwarfs demand.

Anonymous said...

Never fear…the District at Eastover is almost here!

Anonymous said...

Chapter 9 cometh.

Anonymous said...

And don't forget about the zoo.

Anonymous said...

8:32,3 and 9. Obsessing more than usual tonight? Keep talking to yourself.

Anonymous said...

When a city's leadership and legal environment cater to non-taxpayers is any of this really a surprise? Houses in Heatherwood look cheap until you add in the costs per child for private school. Meanwhile houses with working school districts in Madison and Rankin county are selling for the same price but without sewage spraying into the street and water bills based on estimates. I want to stay in Jackson, really I do, but this kind of stuff actively drives out people that normally would be the core of a community.

Anonymous said...

9:00 is another liar.

Anonymous said...

Moody's downgraded over 1600 city and state bonds this go round. They have downgraded others prior to this.

And, the downgrades are as much about cities and states losing federal funding with budget cuts and infrastructure problems as it is about city management.

It's not great but it's hardly reason to panic.

Please, folks, try to read something about how cities decline and resurge and which cities survive and why. Or just read a history of Richmond. It's a good comparison. Detroit isn't, Richmond is. Being a capitol city historically matters.

" Cheap" is relative. If you can't afford Heatherwood, you will be replaced in time by those who can. Indeed, Jackson will in the next three decades be " gentrified" just like every other city on the north east coast where living inside the city limits is only for the wealthy. Compare housing costs of east coast capitol cities to that of their outlying suburbs to get a hint. PS, my starter house inside the city limits of a capitol city just sold for $600000 and I had paid $60000 for it 30 years ago. My friend's house in the closest suburb is only worth a third more.

I know you all think you are smarter than the " outsiders" investing in Jackson. But, it's always " outsiders" who come into a place on decline, see the opportunity to buy cheap, make money and change the culture overtime. Your choice is whether or not your family in the future will still have any social clout in the State.

Here's another hint: The US population has more than tripled over my lifetime. Rural areas have disappeared. You can't create more land.

Anonymous said...

7:07 AM

You are wrong.

You cannot create a demand for existing land which is plagued with sewage and water problems and then which has neighbors who do not work but who do suck money from the system and who control the city.

You see....the jail has been overrun by folks who have not the means or the mind to run it.

Now...AFTER the bankruptcy (like Detroit is experiencing) things may change. When the Regions building sells for a dollar. When the Pinnacle building sells for a dollar. When businesses can make money...and jobs can be had.....MAYBE.

Until have seriously miscalculated what actually exists on the ground. I suggest you go ride around Ellis Avenue a few more time and this time....don't buy the crack.

Anonymous said...

7:07, your comparison of Jackson to Richmond is laughable and desperate. Your anecdotal use of your $600k starter house in some non-disclosed 'capital city' demonstrates the strain to which you have to stretch to make your point. That doesn't and won't happen in this market. There is nothing new driving money back into Jackson, which is what it takes to reverse the tide.

Anonymous said...

Good luck Jackson, you are going to need it. Until the people decide to elect officials who actually want to do their job, instead of lining their pockets and the pockets of their friends, Jackson will sink lower. How about moving the fences for the zoo out to the city limits.

Anonymous said...

There are some economic rules of land ups and downs in prices but what is going on in Jackson is off charts.There is zero way Jackson will ever survive and any investor who think we have seen the bottom is wrong. Just drive through the worst places in the Delta and that is the future of Jackson. The only question is can the metro area make it with a dead central city?

Anonymous said...

The JPS scholar at 6:43 is a MORON! ..."Was it over when the Germans bombed Pearl Harbor??? Hell no!!!"


Anonymous said...

Dang 10:59! Study yur cultural history. That's a Bluto quote.

Anonymous said...

Could it be that the attitude of "it's my way or the highway" and the refusal to admit that the 1950-1960's are in the past, is what is bringing Jackson down? The city must conform to the way nearby suburbs are running their successful towns. Race, income levels and schools should not be compared. The inner workings of the government, rules, regulations and enforcement of the same should be copied. The good things will follow.

Anonymous said...

good points by both sides, but remember, these ratings are still investment grade. not junk.

Anonymous said...

It is all Ben Allen's fault.

Anonymous said...

11:13 That's SENATOR Blutarsky to you :-)

Anonymous said...

Mr. Blutarsky…zero,…point,…zero

Anonymous said...

7:07, seen your comments here before, and no, Jackson is nothing like Richmond. Fondren isn't the Fan (at best, it's Church Hill), and Eastover is a pale imitation of anything south of Cary St (with the possible exception of Windsor Farms) - and I say that as someone who lives in Jackson and likes both those areas. Where's our Belle Isle, our Shockoe, Maymont, Byrd Park?

Kingfish said...


You're an idiot.

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Trollfest '09

Trollfest '07 was such a success that Jackson Jambalaya will once again host Trollfest '09. Catch this great event which will leave NE Jackson & Fondren in flames. Othor Cain and his band, The Black Power Structure headline the night while Sonjay Poontang returns for an encore performance. Former Frank Melton bodyguard Marcus Wright makes his premier appearance at Trollfest singing "I'm a Sweet Transvestite" from "The Rocky Horror Picture Show." Kamikaze will sing his new hit, “How I sold out to da Man.” Robbie Bell again performs: “Mamas, don't let your babies grow up to be Bells” and “Any friend of Ed Peters is a friend of mine”. After the show, Ms. Bell will autograph copies of her mug shot photos. In a salute to “Dancing with the Stars”, Ms. Bell and Hinds County District Attorney Robert Smith will dance the Wango Tango.

Wrestling returns, except this time it will be a Battle Royal with Othor Cain, Ben Allen, Kim Wade, Haley Fisackerly, Alan Lange, and “Big Cat” Donna Ladd all in the ring at the same time. The Battle Royal will be in a steel cage, no time limit, no referee, and the losers must leave town. Marshand Crisler will be the honorary referee (as it gives him a title without actually having to do anything).

Meet KIM Waaaaaade at the Entergy Tent. For five pesos, Kim will sell you a chance to win a deed to a crack house on Ridgeway Street stuffed in the Howard Industries pinata. Don't worry if the pinata is beaten to shreds, as Mr. Wade has Jose, Emmanuel, and Carlos, all illegal immigrants, available as replacements for the it. Upon leaving the Entergy tent, fig leaves will be available in case Entergy literally takes everything you have as part of its Trollfest ticket price adjustment charge.

Donna Ladd of The Jackson Free Press will give several classes on learning how to write. Smearing, writing without factchecking, and reporting only one side of a story will be covered. A donation to pay their taxes will be accepted and she will be signing copies of their former federal tax liens. Ms. Ladd will give a dramatic reading of her two award-winning essays (They received The Jackson Free Press "Best Of" awards.) "Why everything is always about me" and "Why I cover murders better than anyone else in Jackson".

In the spirit of helping those who are less fortunate, Trollfest '09 adopts a cause for which a portion of the proceeds and donations will be donated: Keeping Frank Melton in his home. The “Keep Frank Melton From Being Homeless” booth will sell chances for five dollars to pin the tail on the jackass. John Reeves has graciously volunteered to be the jackass for this honorable excursion into saving Frank's ass. What's an ass between two friends after all? If Mr. Reeves is unable to um, perform, Speaker Billy McCoy has also volunteered as when the word “jackass” was mentioned he immediately ran as fast as he could to sign up.

In order to help clean up the legal profession, Adam Kilgore of the Mississippi Bar will be giving away free, round-trip plane tickets to the North Pole where they keep their bar complaint forms (which are NOT available online). If you don't want to go to the North Pole, you can enjoy Brant Brantley's (of the Mississippi Commission on Judicial Performance) free guided tours of the quicksand field over by High Street where all complaints against judges disappear. If for some reason you are unable to control yourself, never fear; Judge Houston Patton will operate his jail where no lawyers are needed or allowed as you just sit there for minutes... hours.... months...years until he decides he is tired of you sitting in his jail. Do not think Judge Patton is a bad judge however as he plans to serve free Mad Dog 20/20 to all inmates.

Trollfest '09 is a pet-friendly event as well. Feel free to bring your dog with you and do not worry if your pet gets hungry, as employees of the Jackson Zoo will be on hand to provide some of their animals as food when it gets to be feeding time for your little loved one.

Relax at the Fox News Tent. Since there are only three blonde reporters in Jackson (being blonde is a requirement for working at Fox News), Megan and Kathryn from WAPT and Wendy from WLBT will be on loan to Fox. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both and a torn-up Obama yard sign will entitle you to free drinks served by Megan, Wendy, and Kathryn. Get your tickets now. Since this is an event for trolls, no ID is required. Just bring the hate. Bring the family, Trollfest '09 is for EVERYONE!!!

This is definitely a Beaver production.

Note: Security provided by INS.

Trollfest '07

Jackson Jambalaya is the home of Trollfest '07. Catch this great event which promises to leave NE Jackson & Fondren in flames. Sonjay Poontang and his band headline the night with a special steel cage, no time limit "loser must leave town" bout between Alan Lange and "Big Cat"Donna Ladd following afterwards. Kamikaze will perform his new song F*** Bush, he's still a _____. Did I mention there was no referee? Dr. Heddy Matthias and Lori Gregory will face off in the undercard dueling with dangling participles and other um, devices. Robbie Bell will perform Her two latest songs: My Best Friends are in the Media and Mama's, Don't Let Your Babies Grow up to be George Bell. Sid Salter of The Clarion-Ledger will host "Pin the Tail on the Trial Lawyer", sponsored by State Farm.

There will be a hugging booth where in exchange for your young son, Frank Melton will give you a loooong hug. Trollfest will have a dunking booth where Muhammed the terrorist will curse you to Allah as you try to hit a target that will drop him into a vat of pig grease. However, in the true spirit of Separate But Equal, Don Imus and someone from NE Jackson will also sit in the dunking booth for an equal amount of time. Tom Head will give a reading for two hours on why he can't figure out who the hell he is. Cliff Cargill will give lessons with his .80 caliber desert eagle, using Frank Melton photos as targets. Tackleberry will be on hand for an autograph session. KIM Waaaaaade will be passing out free titles and deeds to crackhouses formerly owned by The Wood Street Players.

If you get tired come relax at the Fox News Tent. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both will entitle you to free drinks.Get your tickets now. Since this is an event for trolls, no ID is required, just bring the hate. Bring the family, Trollfest '07 is for EVERYONE!!!

This is definitely a Beaver production.

Note: Security provided by INS