Skip to comments.Moody's targets California cities for downgrades
Posted on 10/10/2012 5:27:33 AM PDT by DeaconBenjamin
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 bonds in 30 California cities. The agency already had downgraded eight municipal pension obligation bonds.
"California cities operate under more rigid revenue raising constraints than cities in many other parts of the country. 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."
Cities under review include Danville, Santa Monica, Sacramento and Fresno. Moody's will examine an array of factors, including falling tax revenue and increased spending.
Downgrades would increase borrowing costs for cities and could hinder their ability to borrow.
The announcement follows an August report in which Moody's predicted more municipal bankruptcies and defaults in California, the nation's largest issuer of municipal bonds. Moody's warned that some cities are turning to bankruptcy as a new strategy to tackle budget deficits and abandon obligations to bondholders.
Three California cities Stockton, San Bernardino and Mammoth Lakes filed for bankruptcy over the summer, although Mammoth's filing was the result of losing a lawsuit.
Last week, the agricultural city of Atwater declared a fiscal emergency and became the latest embattled community to consider bankruptcy.
Moody's, which rates 95 California cities, said it also will review San Francisco and Los Angeles for upgrades.
The other cities that Moody's has targeted for possible downgrades are Azusa, Berkeley, Colma, Downey, Glendale, Huntington Beach, Inglewood, Long Beach, Los Gatos, Martinez, Monterey, Oakland, Oceanside, Palmdale, Petaluma, Rancho Mirage, Redondo Beach, San Leandro, Santa Ana, Santa Barbara, Santa Clara, Santa Maria, Santa Rosa, Sunnyvale, Torrance and Woodland.
(Excerpt) Read more at news.yahoo.com ...
SHOCKED ! UNEXPECTED ! SURPRISING !
it would take less ink and effort to downgrade the entire state.
It’s always raining in sunny California.
Holy cow! Santa Barbara? Yikers!
LA for an UPGRADE?....NFW
If that's the case, they're definitely screwed.
I’m Stuned I tell ya.
Now, let’s look at the towns that are run by Republicans and compare it to the towns run by Democrats.
I bet the numbers would be very interesting.
And it would make a great camapign ad for Romney.
How’d Moody’s miss Guadalupe, Lompoc, and Goleta?
How about Cucamonga(sp)?
Overall, California COULD slow the slide somewhat if they would ditch, for good and all, the “train to nowhere” that is slated to be built somewhere up the San Joaquin Valley.
Poorly conceived, poorly placed, and with no discernable economic value. Commuter planes are already in place, and were the Transportation Security Administration procedures to be streamlined to perform in an effective manner, the volume would almost insure, that high-speed inter-urban passenger rail was totally obsolete.
If the functioning tracks and right-of-way do not already exist, then there is no economical way to put them in place now.
Another thing that California could do, but has no will to do so, is a little self-help on energy production and distribution. Opening up the off-shore oil wells could vastly improve their supply of petroleum and natural gas to power their energy demands, and restricting the application of the California Air Regulatory Board to the parts of California where there is a problem, would do much to reduce the regulatory restrictions that is choking off productivity in what is probably the one state in the US with the greatest endowment of natural resources.
As it is, California is rapidly descending into a Third-World country, with the economic clout of Greece.
Can the rest of the United States just kick California OUT of the US?
No problem, just sell more bonds at a higher interest rate, right?
It’s been explained on this site, that if California goes over the cliff, it could lose its state status and revert back to being a territory, administered by the federal government.
Perhaps that is the intent. The tenth amendment is such an inconvenience to the dictatorial mindset.
The residents all reliably vote Democrat.
Warren Buffet halved his 16 billion exposure to municipal bond insurance just last month.
The downgrade should start with Sacramento
are there any live ones in the city of the dead?
Yep, start with the epicenter of the one-party government.
I live in Sacramento county and it is amazing how many empty office units there are.
Sorry to see Redondo Beach on the list -- one of my favorite California cities.
Surprisingly COMPTON is not mentioned, and yet they are according to an article a couple of months ago in deep doo doo considering bankruptcy.
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