Reuters: Bankruptcy News: UPDATE 1-Moody's affirms Ca rating on Jefferson County sewer warrants

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UPDATE 1-Moody's affirms Ca rating on Jefferson County sewer warrants Aug 15th 2013, 19:40 Thu Aug 15, 2013 3:40pm EDT Aug 15 (Reuters) - Moody's Investors Service on Thursday affirmed its Ca rating and negative outlook on Alabama's bankrupt Jefferson County, sewer revenue warrants. The rating, deep in junk territory, affects $3.1 billion of outstanding debt. Moody's said in a news release its rating reflected an expectation that holders of the county's defaulted sewer debt would recover between 35 percent and 65 percent of the bond's value. It said the county's plan of adjustment being considered by creditors would "lead to a recovery toward the high end of the Ca rating recovery." The county's plan made public in June turns on a planned bond sale late this year that would pay off current sewer creditors at about 60 cents on the dollar. Moody's said it was retaining its negative outlook because of "the possibility that the ultimate recovery rate could fall below 35 percent if the proposed restructuring fails to materialize as currently envisioned." Home to Birmingham, Alabama's largest city, Jefferson County filed for what it is now the nation's second largest municipal bankruptcy in November 2011. It has since worked out a negotiated settlement with creditors that appears on track for implementation this year.

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