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.
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