Rocky Mount, N.C., rating dropped to A from AA-minus by S&P

S&P Global Ratings downgraded Rocky Mount, North Carolina, to A from AA-minus, citing tight cash due to overspending, and revised the outlook to negative.

The action comes two weeks after the state Local Government Commission threatened to take over the city unless the city improved its financial operations.

S&P said the downgrade partly stemmed from the insufficient internal controls that led to fund mismanagement.

The city's per capita income remains lower than the national average, S&P said. However, the value of the city's real estate is growing.

The LGC is monitoring developments on at least a biweekly basis, which S&P said is a credit positive. The city has a five-year capital improvement plan.

The government projects its cash balance to decline to $2.7 million by August 2026 from $24.3 million as of March 31. This projection may prove pessimistic as it assumes the same level of capital spending as in 2025, but the city has curtailed this spending.

The city has about $91.5 million in debt outstanding and plans to refinance bonds in the next few months for cash flow and interest savings.

The city's bond debt consists of special obligation bonds secured by non-ad valorem sources such as sales and other taxes.

The city's mayor didn't immediately return a request for a comment.

Moody's downgraded the city to A1 from Aa2 earlier this month and gave it a negative outlook.