Moody's may downgrade $12.5 billion in muni debt - MarketWatch

Moody's may downgrade $12.5 billion in muni debt - MarketWatch

Credit rating agency Moody's Investors Service revised its methodology for analyzing municipal pension obligations Wednesday, in the process placing the credit ratings of $12.5 billion in municipal securities under review for possible downgrade. Those cities under review for downgrade include Chicago, Cincinnati, Minneapolis, Santa Fe, and Portland. Pension liabilities have been a key cause for concern in the $3.7 trillion municipal bond market, with the two most recent cities to file for municipal bankruptcy -- Stockton, CA and San Bernardino, CA -- both suffering from outsized liabilities. In an effort to recognize the impact of liabilities on credit-worthiness, the rating house will take into account the size of adjusted pension obligations relative to total resources, Moody's said.