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Moody's downgrades various Detroit bond ratings

Moody's downgrades various Detroit bond ratings

March 21st, 2012 in News

DETROIT (AP) - Moody's Investors Service has downgraded more than $2.5 billion of Detroit's debt below investment grade, possibly making it even more difficult for the city to borrow money.

The rating's service says the downgrades on several different bonds are based on the city's "weakened financial position, as evidenced by its narrow cash position," reliance on debt financing and ongoing negotiations with unions on contract concessions.

Detroit faces a $200 million budget deficit and could run out of cash by late May. The city is negotiating a consent agreement with the state to prevent Gov. Rick Snyder from appointing an emergency manager over Detroit's finances.

Mayor Dave Bing said Tuesday the downgrade wasn't unexpected.

Standard & Poor's in 2009 lowered its rating of Detroit's bonds to junk status.