---
title: "S&P Slashes New Orleans' Credit Rating On \"Structurally Imbalanced Operations\""
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/282112069.md"
description: "S&P Global Ratings has downgraded New Orleans' general obligation rating to BBB+ with a negative outlook, citing structurally imbalanced finances and a projected $160 million deficit for fiscal 2025. The city faces challenges in achieving financial stability, relying on one-time measures and borrowing for liquidity. This follows a previous downgrade by Moody's, highlighting ongoing fiscal strain under decades of Democratic governance. Analysts express skepticism about the city's ability to achieve balanced operations by 2027 due to significant budgetary challenges."
datetime: "2026-04-09T00:32:24.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/282112069.md)
  - [en](https://longbridge.com/en/news/282112069.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/282112069.md)
---

# S&P Slashes New Orleans' Credit Rating On "Structurally Imbalanced Operations"

New Orleans, home to Mardi Gras and muffulettas, has been governed by Democrats for decades, so it should come as little surprise that **S&P Global Ratings has slashed the city's obligation rating** to the third-lowest level of investment grade and placed it on a negative outlook.

S&P Global Ratings cut New Orleans' general obligation rating by one notch to BBB+ with a negative outlook, citing structurally imbalanced finances, shrinking reserves, and growing reliance on one-time desperate measures to meet cash needs.

"The downgrade and negative outlook reflect the **city's structurally imbalanced operations**, **declining reserves and liquidity**, and need to rely on multiple one-time measures to meet short-term cash needs, including additional borrowing for operating liquidity," S&P Global Ratings analysts Alex Louie and Sarah Sullivant wrote in the report.

The **downgrade serves as a warning** of worsening fiscal strain, with the city projecting a $160 million deficit in fiscal 2025 and continuing to rely on stopgap measures, including borrowing to maintain operating liquidity, tapping external funds, and maintaining hiring freezes and furloughs.

The analysts continued, "Despite these measures, **we believe the city still faces substantial challenges** in achieving those goals and has a history of management projections not meeting actual audited results."

In February, **Moody's downgraded the city's credit rating** by two notches to the bottom of investment grade and warned investors about risks to future bond sales amid a budget crisis.

New Orleans' rapidly deteriorating credit profile comes as no surprise, given that **Democrats have governed the metro area for a generation**.

Here is the list of the mayors:

-   Helena Moreno, 2026 to present, Democrat
-   LaToya Cantrell, 2018 to 2026, Democrat
-   Mitch Landrieu, 2010 to 2018, Democrat
-   Ray Nagin, 2002 to 2010, Democrat, after previously switching from the Republican Party
-   Marc Morial, 1994 to 2002, Democrat
-   Sidney Barthelemy, 1986 to 1994, Democrat
-   Ernest N. Morial, 1978 to 1986, Democrat
-   Moon Landrieu, 1970 to 1978, Democrat

S&P Global Ratings analysts noted that although the city expects balanced operations in 2027, "**given the city's significant budget and operational challenges, achieving structural balance could take longer**."

**For some history**, thelast Republican mayor ofNew Orleans was Benjamin Flanders,who served from 1870 to 1872.

### Related Stocks

- [DIA.US](https://longbridge.com/en/quote/DIA.US.md)
- [MCO.US](https://longbridge.com/en/quote/MCO.US.md)
- [PRIV.US](https://longbridge.com/en/quote/PRIV.US.md)
- [DDM.US](https://longbridge.com/en/quote/DDM.US.md)
- [VOO.US](https://longbridge.com/en/quote/VOO.US.md)
- [SPGI.US](https://longbridge.com/en/quote/SPGI.US.md)

## Related News & Research

- [S&P Global Declares Second Quarter Dividend | SPGI Stock News](https://longbridge.com/en/news/286969622.md)
- [Why S&P Global stock topped the market today](https://longbridge.com/en/news/286829085.md)
- [GameStop Wants to Buy eBay. It Could Collapse Its Credit Rating and Valuation in the Process.](https://longbridge.com/en/news/287079995.md)
- [Northwestern Mutual Wealth Management Co. Increases Stock Holdings in Moody's Corporation $MCO](https://longbridge.com/en/news/286744288.md)
- [S&P Global and the S&P Global Foundation Announce Next Phase In $10 Million StepForward Initiative | SPGI Stock News](https://longbridge.com/en/news/286412388.md)