Bankruptcy

Their Debt is Downgraded to Junk

By mcbride

But it is not some foreign country enmired in an economic crisis of its own making.  These issuers of now junk debt are 7 American cities.  ?Think Greece and Spain are drowning in debt? Look a little closer to home. Seven U.S. cities recently had their municipal bonds downgraded below investment grade. Their debt is now junk, considered more worthless than that of the so-called PIIGS.?  One of these cities (Central Falls, R.I.) was downgraded after (!) ?the city was put under receivership last week [such that]? a court-appointed lawyer managing its finances and future.?  The timing of that downgrade points out the reluctance of the grading agencies to be honest in their assessment.  If a city has to be put into a receivership before it is downgraded, one should question the reliability of the company doing the grading! 

 Here is a link: http://money.cnn.com/2010/06/01/news/economy/junkiest_cities/index.htm?source=cnn_bin&hpt=Sbin

 Michael

Full post as published by Texas Lawyer Blog on June 02, 2010 (boomark / email).