'Negative' Outlook for Boro Debt Rating

In a move that could make it more difficult for the borough to borrow money, Standard & Poor's Ratings Services this week revised the outlook on its 'AAA' rating on Madison's general obligation debt to negative from stable.

"The outlook revision reflects Standard & Poor's assessment of the borough's financial deterioration due to four years of operating deficits and a continued structural current fund imbalance," the agency said in a credit research report to  subscribers Thursday.

It affirmed its 'AAA' rating on the borough's debt — its highest possible rating. It reaffirms as exceptional the borough's creditworthiness and indicates that it can easily meet its financial commitments.

A negative outlook, however, could send a message to the markets when Madison wants to finance debt, although the borough has had little recent problem in that department.

"Management's failure to rectify the structural current fund imbalance and continued surplus declines could result in a downgrade," said credit analyst Nicole Ridberg. "If management were to maintain balanced current fund operations and, what we consider, strong reserves, however, we could revise the outlook to stable."

"S&P maintained Madison's AAA credit rating which we've had since 2004," said Borough Administrator Ray Codey, in an email to Patch. "We're one of only 10 towns out of 566 New Jersey municipalities with the highest credit rating."

Codey said that no bond sales are anticipated in 2012.