Friday morning saw the release of nonfarm payroll numbers for January, which came in at a solid rise of 257,000, above the expected 228,000. Though 257,000 jobs were added, the unemployment rate stuck at 5.7%, which was due to more people joining the labor force. The January jobs report also showed increasing wages. In other maco news, ISM manufacturing came in at 53.5, which is slightly below the 54.5 that was expected. Factory orders were also disappointing, coming in at -3.4%, compared to the -2.4% expectation. Yields on 10-year Treasuries were up this week, starting on Monday at 1.68 and closing out Thursday at 1.83. Below, we look at Moody’s municipal bond upgrades and downgrades from the past week.

• Woodford County, IL: Moody’s upgraded this county to Aa1 from Aa2. The Aa1 rating reflects the county’s very strong reserve position and low degree of leverage from debt and pension obligations. The Aa1 also incorporates the county’s moderately sized tax base that has grown consistently over the last several years, and above average socioeconomic traits.
• Long Beach, NY: Moody’s upgraded this city to Baa2 from Baa3. The upgrade to Baa2 reflects the city’s narrow but improved financial position following the issuance of deficit reduction bonds in fiscal 2014. Additionally, Long Beach was greatly affected by Hurricane Sandy, resulting in significant damage to the city’s infrastructure. The rating also factors the city’s sizable tax base with above average wealth levels and a manageable debt burden.
• Fair Lawn School District, NJ: Moody’s upgraded this school district to Aa2. The upgrade to a Aa2 underlying rating reflects the district’s improved financial position with solid reserve levels, large and stabilizing tax base with wealth levels above the state and national medians, a manageable debt burden, and below-average pension liabilities.
• City of Le Center, MN: Moody’s upgraded this city to Ba3 from B1. The upgrade to Ba3 reflects the city’s improved financial position due to two years of operating surpluses on an audited basis and an estimated operating surplus in fiscal 2014. While the city’s General Fund reserves have substantially improved, they remain small on a nominal basis. City management has also implemented a long range financial management plan that provides ten year forecasts of the city’s cash fund balance. In addition, the city’s cash flow management has improved and borrowing is expected to be significantly smaller in 2015.
• City of Redmond Water Enterprise, OR: Moody’s upgraded this city’s water enterprise to Aa3 from A1. The upgrade to Aa3 primarily reflects the water system’s consistently robust financial position, which includes ample liquidity and strong debt service coverage. Management maintains prudent financial and capital plans, and demonstrates sound rate setting practices that include annual water rate increases. The utility’s asset condition remains sound and is supported by prudent ongoing investments in system maintenance. Also, legal provisions are satisfactory.
• County of Iredell, NC: Moody’s upgraded this county to Aa1. The Aa1 reflects the county’s sizeable growing tax base, solid financial position supported by healthy reserves and liquidity, and average debt profile with rapid payout.

• Southcoast Health System, MA: Moody’s downgraded this health system to A3 from A2. The rating downgrade to A3 is attributable to the ongoing nature of turnaround efforts and operational improvements at the physician division that is a critical factor to meeting budget in FY 2015. Additional factors include weak financial performance over the last two years, the possibility of additional debt financing over the near term, and drawdown of the organization’s balance sheet reserves in order to fund capital expenditures and operating losses. These factors are offset by the organizations good balance sheet and strong market position.
• Village of Morton Grove, IL: Moody’s downgraded this village to Aa3 from Aa2. The Aa3 reflects the village’s moderately-sized but declining tax base located in the Chicago (Baa1/negative) metro area, strong demographic profile, healthy fund balance but narrow cash reserves due to a large contingent liability, and a manageable debt burden. The rating also reflects a high adjusted net pension liability relative to tax base and revenue, as well as the village’s flexibility to raise revenue given its status as an Illinois (A3/negative) home rule community.
• Coalinga Public Finance Authority, CA: Moody’s downgraded this public finance authority to Baa1 from A3. The downgrade to Baa1 reflects the underlying credit factors of the city’s water and wastewater enterprises and their relative contributions to debt service on the authority’s revenue bonds. The rating methodology used was the Public Sector Pool Financings, using the “weak link plus” approach. The respective participants of the pool are Coalinga Water Enterprise (76%) and Coalinga Wastewater Enterprise (24%).