Detroit— The uncertainty over a lawsuit filed by lead city attorney Krystal A. Crittendon that could halt the city's consent agreement with the state has led one of the top rating agencies to downgrade the city's bond status.
Fitch Ratings announced Tuesday that it has downgraded several areas in the city's bonds. Downgraded were the city's unlimited general tax obligation bonds to CCC from B, limited tax general obligation bonds from CC from B- and pension obligation certificates of participation though the Detroit Retirement Systems Funding Trust, Michigan to CC from B.
Fitch said the possibility that the city would not make a debt service payment on its pension certificates of participation is a driving force behind the downgrade.
"Fitch believes there are actions available to both the city and the state that would (ensure) the payment is made but that the current level of uncertainty so close to a bond repayment date is consistent with a higher probability of default than the prior B- category ratings implied," the Fitch report said.
From The Detroit News:
http://www.detroitnews.com/article/20120612/METRO01/206120422#ixzz1xgIMEoLF
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