SACRAMENTO, Calif. (AP) — One of the nation's top credit rating agencies announced Tuesday that it will review dozens of California cities for possible downgrades amid mounting concern over municipal bankruptcies and bond defaults.
Moody's Investors Service will scrutinize the ratings of various types of bonds in 30 California cities. The agency also announced that it already had downgraded eight municipal pensionobligation bonds.
"California cities operate under more rigid revenue raising constraints than cities in many other parts of the country," Eric Hoffmann, who heads Moody's California local government ratings team, said in a statement. "Combined with steeply rising costs, these constraints mean that these cities will likely recover more slowly than their peers nationally, even if the state's economic recovery tracks the nation's."
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