Detroit's rising possibility of bankruptcy cited in bond downgrade
Bond rating slashed to non investment-grade territory
Moody's Investors Service has downgraded the city of Detroit's bond ratings yet again, this time pushing them into non investment-grade territory.
The group says, "These downgrades reflect the city's ongoing precariously narrow cash position and a weakened state oversight framework following the repeal of Public Act 4."
Moody's also says the negative outlook is "based on the rising possibility that the city could file for bankruptcy or default on an obligation over the next 12 to 24 months, the general uncertainty of state oversight as challenges to Public Act 72 (PA 72) persist following the repeal of PA 4, and the city's ongoing inability to implement reforms necessary to regain financial stability."
The announcement, which came Wednesday, is another blow to the Bing administration and Detroit City Council, who have been unable to agree on most matters involving restructuring the City's finances.