Reuters: Bankruptcy News: Growing chance Stockton, Calif., defaults -Moody's

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Growing chance Stockton, Calif., defaults -Moody's Jun 13th 2012, 22:07 SAN FRANCISCO, June 13 | Wed Jun 13, 2012 6:07pm EDT SAN FRANCISCO, June 13 (Reuters) - Stockton, California, faces a growing likelihood of defaulting on some of its debt obligations as the conclusion of confidential talks with its creditors aimed at averting bankruptcy nears, Moody's Investors Service said in a statement on Wednesday. Stockton is in mediation with its creditors, trying to obtain concessions to help close a $26 million budget gap before the July 1 start of its fiscal year. If the city, located 85 miles east of San Francisco in California's Central Valley, cannot obtain sufficient concessions by the end of June, it may file for bankruptcy. "The city's ratings, even on secured obligations, could be subject to further downgrades in a bankruptcy," Moody's said. (Reporting By Jim Christie)

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