Reuters: Bankruptcy News: UPDATE 1-S&P cuts Detroit GO bond ratings to D following default

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UPDATE 1-S&P cuts Detroit GO bond ratings to D following default Oct 2nd 2013, 16:53 Wed Oct 2, 2013 12:53pm EDT Oct 2 (Reuters) - Standard & Poor's said it cut its rating on Detroit's general obligation debt rating to D from C on Wednesday due to the city's missed payment on its bonds, making S&P the second ratings agency to downgrade Detroit this week. Fitch Ratings cut its rating on Monday on the city's imminent debt default. "The downgrade reflects the nonpayment of debt service to the paying agent for the scheduled principal and interest payment date of Oct. 1," S&P credit analyst Jane Hudson Ridley said in a statement. S&P said the downgrade affects about $411 million of unlimited-tax GO bonds and $197 million of limited-tax GO bonds. Detroit on Tuesday skipped a payment on more than $600 million of general obligation debt that the city's emergency manager, Kevyn Orr, had determined to be unsecured. In June, Orr announced a moratorium on paying debt service on unsecured debt, including certain GO bonds and $1.45 billion of pension debt that the city defaulted on that month. With Detroit sinking under more than $18 billion of debt and other obligations, Orr on July 18 filed what would be the biggest Chapter 9 municipal bankruptcy in U.S. history. Detroit did make a payment due Tuesday on its water and sewerage department's state revolving fund loans, Fitch said on Wednesday. Link this Share this Digg this Email Reprints

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