Moody's Investors Service yesterday lowered its rating for all debt guaranteed by Essex County, N.J., to A from A1, citing the county's strained fiscal position.

The downgrade extends to all $216 million of outstanding county-guaranteed debt issued by the Essex County Improvement Authority. The county itself has $308 million of outstanding general obligation bonds, all of which are insured.

Essex County goes to market today with $40 million of one-year bond anticipation notes for ongoing capital projects. Moody's looked at the long-term rating in conjunction with the short-term sale, rated MIG-1 by the agency.

The notes received Moody's highest short-term rating "because Essex is still an A-rated county, which indicates sufficient market access," said Moody's vice president Marci Herzlinger Tavashi.

But the county faces a potential deficit of $20 million to $30 million for the close of fiscal 1994, the rating agency said in a release. Furthermore, Essex County will have to deal with a $9 million deficit from fiscal 1993 in the 1995 fiscal year starting Jan. 1, Moody's said.

As evidence of strained cash flow, Moody's noted that the county will probably have to pay off $75 million of tax anticipation notes, due Dec. 19, by issuing new TANs.

Looking to next year, Moody's said that Republican county executive-elect James Treffinger, who takes office in January, "faces the challenge of restoring fiscal stability."

The rating agency also said that below-average income levels and above-average poverty and employment rates have contributed to the erosion of the urban county's credit base. New Jersey's largest city, Newark, is located in Essex County.

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