Vadnais Heights bonds now 'junk'by Curtis Gilbert, Minnesota Public Radio
ST. PAUL, Minn. — Moody's Investors Service has downgraded the bond rating of the east metro suburb of Vadnais Heights to junk status.
Moody's dropped the city's general obligation bond rating to Ba1, which means the bonds' "future cannot be considered as well-assured."
The downgrade comes in response to the city's decision to stop subsidizing debt payments on the Vadnais Sports Center at the end of this year. Since the center opened in 2010, the city has loaned it more than $800,000 dollars.
Junk bond status will make it harder for the city to borrow money and will likely increase its interest rate on future debt. But City Council Member Joe Murphy said Vadnais Heights made the right decision.
"We have no plans to bond for anything in the near future, and down the road if we were to bond, the cost of that bonding would be a lot less than the cost to stay in the Sports Center," Murphy said.
The center remains open under an interim manager, while the non-profit organization that owns it looks for ways to improve its finances.
Another agency, Standard & Poors, downgraded Vadnais Heights' credit rating last month from A to B, which is also considered junk status.