Tags: Moodys May Downgrade Debt of California Cities

Moody's May Downgrade Debt of 32 California Cities

Tuesday, 09 Oct 2012 08:40 PM

The debt of 32 California cities has been placed under review because of economic pressures in the state, Moody’s Investors Services said.

The examinations of $14.3 billion in lease-backed and general-obligation ratings in the municipalities “are mostly for downgrade,” the New York-based rating company said Tuesday in a statement.

“California cities operate under more rigid revenue- raising constraints than cities in many other parts of the country,” Eric Hoffmann, who heads Moody’s California local government ratings team, said in a statement. “Combined with steeply rising costs, these constraints mean that these cities will likely recover more slowly than their peers nationally, even if the state’s economic recovery tracks the nation’s.”

Communities in California have struggled to stay afloat by cutting staff and services to make up for a drop in sales and property tax revenue in the wake of the recession. Stockton, San Bernardino and Mammoth Lakes have gone into bankruptcy court since June.

Moody’s said it identified the credits as part of a broader review started in August of 95 rated cities in California.

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The debt of 32 California cities has been placed under review because of economic pressures in the state, Moody's Investors Services said.
Moodys May Downgrade Debt of California Cities
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2012-40-09
Tuesday, 09 Oct 2012 08:40 PM
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