Press Release|Public Finance

KBRA Downgrades Borough of Upland, PA General Obligation Notes to BBB+ from A-; Outlook Stable

21 Dec 2023   |   New York


KBRA downgrades the long-term rating to BBB+ from A- for the Borough of Upland, PA's General Obligation Notes. The Outlook is Stable.

The downgrade reflects the Borough of Upland’s (“the Borough’s”) lack of timely financial disclosure, namely audited financial statements for CY 2022, which are now nearly a year late, and, in KBRA’s view, the overall less sophisticated financial management infrastructure underpinning Borough operations. Operating deficits in four of the last five fiscal years, despite considerable federal pandemic stimulus funding, also informed KBRA’s rating action.

The long-term rating incorporates the Borough’s deteriorating liquidity and general fund balance; continued uncertainty surrounding a potential, forthcoming sale of the Crozer Health System and its effects on the Borough’s tax base; and the utilization of a cash basis of accounting, which KBRA views as providing a less comprehensive view of fiscal operations. Somewhat offsetting the aforementioned concerns are the Borough’s well-funded pensions and affordable fixed cost burden.

Key Credit Considerations

The rating was downgraded because of the following key credit considerations:

Credit Positives

  • Well-funded pensions and affordable fixed costs burden.

Credit Challenges

  • Realization of general fund operating deficits in four of the last five fiscal years resulting in a significant decline in reserves and liquidity.
  • Low resident income and wealth levels coupled with high poverty rate when compared to the Commonwealth.
  • Dependence of revenue base on earned income taxes.

Rating Sensitivities

For Upgrade

  • Reversal of negative operating trends and rebuilding of reserve balances.
  • Reduced dependence on volatile earned income tax receipts.
  • Adoption and implementation of formal policies for maintenance of general fund reserve levels.

For Downgrade

  • Continuing trend of structural imbalance in operations causing further deterioration in reserve balances.
  • Impairment of tax base driven by a restructuring or cessation of operations at the Center.

To access rating and relevant documents, click here.

Click here to view the report.



Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

Doc ID: 1002918

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