Moody’s Issues Negative Outlooks for 7 North Carolina Counties
Just as Merideth Whitney warned municipal bonds are stressed by towns, cities and counties finding themselves caught in the debt trap and not finding a way out. Central Falls, RI and Jefferson County, Alabama have already sought bankruptcy protection due to their inability to honor pension obligations. With an overall downgrade of American debt by S&P credit agencies are taking closer looks at the stressed muni bond market and they’re not happy with what they’re seeing:
RALEIGH, N.C. (AP) – A bond rating agency has told 5 of North Carolina’s biggest counties and 2 of its larger cities that they retained their good credit rating but their outlook is negative.
Moody’s Investors Service confirmed the AAA ratings of Winston-Salem and Greensboro and Durham, Guilford, Mecklenburg, New Hanover and Wake counties, but said their debt had a negative outlook.
The local governments were among five states and hundreds of communities whose finances were indirectly linked to the U.S. government. The governments were removed from a watch list for possible downgrade with the threat of Washington’s default averted.
Moody’s says it will review the prospects of each borrower in the weeks ahead and report a stable outlook for municipalities that show credit strong enough to withstand a downgrade of U.S. government debt.
This and commercial real estate will be the next big financial stories. Get your money out of risky assets while you have a chance Greenville County bondholders I’m looking at you.