Local Governments Brace For US Debt Downgrade |
| Wall Street Journal - Jul 28, 2011 |
A cut to the federal government's debt rating could have knock-on effects for scores of local governments and publicly financed projects, a ratings firm warned Thursday.
Moody's Investors Service said it will review for possible downgrade the Aaa ratings of 177 agencies, including 162 local governments in 31 states, 14 housing finance programs and one university, affecting a combined $69 billion of outstanding debt.
The governments include 66 cities, 53 counties, 29 school districts and 14 special tax districts, with the heaviest concentrations in Virginia and Massachusetts.
This latest rating agency warning comes as the municipal bond market braces itself ahead of the Aug. 2 deadline for the federal government to raise its $14.29 trillion debt ceiling or face a possible default.
"Our market is definitely on pause," said Tim Pynchon, municipal bond portfolio manager at Pioneer Investments. "We'd had signs of very good liquidity and very healthy trading up until the past few days, and then everyone's attention has turned to the immediate deadline looming."
Read Full Article from Wall Street Journal
- Posted: 2011-07-28 17:22:41
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