Reuters: Bankruptcy News: Central Falls bankruptcy credit positive for R.I. cities: Moody's

Reuters: Bankruptcy News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

Central Falls bankruptcy credit positive for R.I. cities: Moody's Sep 13th 2012, 20:26 Sept 13 | Thu Sep 13, 2012 4:26pm EDT Sept 13 (Reuters) - Confirmation of Central Falls' bankruptcy plan has a positive effect on other Rhode Island cities because it establishes a way out of bankruptcy that spares general obligation bondholders, Moody's Investors Service said on Thursday. The city won court approval on Sept. 6 for its Chapter 9 municipal bankruptcy plan, which hikes taxes, cuts employees and pensions, and reworks labor contracts while leaving bondholders whole. Moody's said that the plan and strong state intervention are not just a credit positive for Central Falls, but also for surrounding towns and cities, several of which are facing financial distress. "It is credit positive for other distressed Rhode Island cities because it shows a path to emerging from bankruptcy without defaulting on G.O. debt," Moody's said in a commentary. The city, which is just 1.2 square miles large and has a population of about 19,400, filed for bankruptcy in August 2011. It had suffered deep cuts in state aid and revenue shortfalls and it had an unfunded liability of about $80 million for pension and retiree health benefits. Moody's currently rates the city Caa1 but it is on review for an upgrade. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions