On Wednesday [11/28], Moody's Investor Service downgraded the Department's water and sewer bond rating for the second time in 7 months.
Concurrently, Moody's has downgraded the ratings for the Detroit Water and Sewage Enterprise Revenue debt one notch to Baa3 (Senior Lien) and Ba1 (Second Lien) as the rising risk of a city bankruptcy filing brings ongoing uncertainty regarding the treatment of these securities in the event of a filing. Ratings for the Detroit Water and Sewage Enterprise Revenue Bonds have been removed from review for possible downgrade and the outlook has been revised to negative. The negative outlook for the water and sewer debt is based on the increasing possibility that the city could file for bankruptcy over the next 12 to 24 months.The last downgrade of DWSD's bond rating by Moody's occurred on April 9, 2012, as we reported here.
For more about DWSD Update, click here.