Reuters: Bankruptcy News: UPDATE 1-Fitch cuts Detroit's GO ratings to D on imminent default

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UPDATE 1-Fitch cuts Detroit's GO ratings to D on imminent default Sep 30th 2013, 20:56 Mon Sep 30, 2013 4:56pm EDT Sept 30 (Reuters) - Fitch Ratings on Monday dropped Detroit's general obligation bonds ratings to the lowest level of D, from C, a day ahead of the city's expected default on its debt-service payments. "Fitch takes this action in response to the city's publicly announced intention to default on the scheduled interest payments on limited and unlimited tax general obligation bonds due on Oct. 1, 2013," the rating agency said in a statement. Kevyn Orr, Detroit's state-appointed emergency manager, announced on June 14 a payment moratorium on about $641 million of general obligation debt considered to be unsecured. Orr's spokesman said earlier this month that nothing has changed since that time. Detroit, which filed what would be the biggest municipal bankruptcy on July 18, classified about $411 million of voter-approved unlimited tax general obligation bonds as unsecured debt, even though the bonds are backed by a special property tax levy. Fitch said its downgrade affects about $411 million of the city's unlimited tax general obligation bonds and $202.8 million of limited tax general obligation bonds.

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