Moody’s lowers Braintree credit rating to AA3; town leaders call decision "rearview" assessment

Moody’s Investors Service lowered the Town of Braintree’s credit rating from AA2 to AA3 on Oct. 15, the town’s finance director told the Town Council on Oct. 21. Finance Director Mike Esben said the downgrade was driven mainly by a drop in reported reserves for fiscal 2024 and by Moody’s internal scorecard, and described the action as a backward‑looking assessment of past financial results.

“We would just call your attention to a statement that the mayor’s office put out,” Esben told the council. He added, “This decision by Moody’s is one that is very much a rearview‑mirror decision,” and said the town has published the agency’s report and is sharing additional materials for transparency.

Esben said Moody’s flagged the town because of fiscal‑year 2024 results: reserves fell relative to operating revenues, triggering a scorecard flag that led to the downgrade. He said the town has taken corrective actions—spending controls, management reforms and pursuing a voter‑approved override—and that there is no immediate impact because Braintree was not in the market to issue debt at the time of the rating action. He noted Moody’s has not rated the town’s debt regularly (Moody’s last ranked municipal debt for the town in 2015); S&P has been used on recent issues.

Councilors pressed for context and timing. Councilor Shelagh Bridal asked whether the figures in question covered development through the South Shore Plaza and other projects; Esben and Mayor Joyce said the agency’s review looked at fiscal 2024 financials, which concluded on June 30, 2024, and therefore reflects earlier conditions. Councilor Michael Moore called the downgrade a “transitional moment” and described it as a unilateral action by a rating agency that does not reflect corrective actions taken since fiscal 2024, including a successful override. Several councilors said they expected stronger financial indicators going forward.

Esben said the next opportunity for a rating revision would come after new financial statements are released for fiscal 2025; he said the town expects to be back in the market for borrowing in late winter or early spring and will brief the council at Ways and Means on request. He cautioned that rating agencies follow their own schedules and review official, published financials when assessing municipal credit.

What it means: Town officials said the downgrade does not immediately change borrowing costs because no debt was being issued at the time and Moody’s action is based on past audited results. However, a lower rating could affect rates when the town borrows for short‑term or long‑term capital needs; officials said they will continue to rebuild reserves and monitor debt‑capacity metrics.

Sources: remarks by Mike Esben (finance director) and Mayor Erin Joyce and questions/comments by Councilors Shelagh Bridal, Michael Moore and others at the Oct. 21 Braintree Town Council meeting.