S&P slashes Atlantic City credit rating four notches deeper into junk
(Reuters) - Atlantic City, New Jersey's distressed gambling hub, had its credit rating cut four notches deeper into junk territory on Friday on the likelihood of a debt default in the next six months.
Standard & Poor's Ratings Services issued the super-downgrade of the city's bonds, to 'CCC-' from 'B,' because a default or distressed exchange or redemption "appears to be inevitable" unless there is an "unforeseen positive development," said S&P analyst Timothy Little in a comment.
The city's cash flow will run dry by April unless the state takes extraordinary action to help. However, on Tuesday Governor Chris Christie vetoed legislation that had aimed to stabilize the city's property tax base and boost its current cash flow.
He also shot down a bill that would have redirected funds to pay debt service specifically.
S&P's rating could be cut further, he said, if the city files for municipal bankruptcy, which local officials are scheduled to consider at an emergency City Council meeting next week.
Such a filing could be futile since the state would have to approve it. State lawmakers are seeking to take over city operations instead.
(Reporting by Hilary Russ in New York; Editing by James Dalgleish)
