Detroit unlikely to make general obligation bond payments: Fitch

Reuters News
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Posted: Jul 19, 2013 3:09 PM
Detroit unlikely to make general obligation bond payments: Fitch

WASHINGTON (Reuters) - The chances that Detroit, Michigan, will make full and timely payments on its unlimited general obligation bonds are low, a major rating agency said on Friday, a day after the city filed for the largest municipal bankruptcy in U.S. history.

According to Fitch Ratings, the city's next payment on its general obligation bonds is due October 1. The agency noted Detroit, which has financially struggled for years, has so far adhered to "its pledge to levy and collect a voter-approved tax specifically for" general obligation payments.

Last month, the city skipped paying debt service on taxable pension bonds and its bondholders have worried it would miss deadlines for general obligation bonds that are supposed to be backed by the city's full faith and credit.

(Reporting by Lisa Lambert; Editing by James Dalgleish)