Greece is the word

While we worry, sort of, about the Grecian formula for bankruptcy, it turns out that seven cities in the US have spectacularly-bad credit:

Last quarter, Moody’s Investor Services declared the debt issued by Harrisburg, Pa., and Woonsocket, R.I., to be junk, or below-investment grade. Meanwhile, Fitch Ratings currently has four other cities in the basement — Detroit and Pontiac, Mich.; Harvey, Ill.; and Littlefield, Texas — while Standard and Poor’s has one — Central Falls, R.I.

As Ed McMahon might have said: “How bad are they?”

Moody’s knocked the rating on Harrisburg’s general-obligation bonds three notches to B2 — five steps below investment grade. To put that into perspective: Moody’s rating on Greece’s government debt sits at A3 — still investment grade.

Central Falls gets a C from S&P, which is one step above actual default.

Should anyone be concerned: Oklahoma City’s bonds are rated at Aaa by both S&P and Moody’s.

You might be a bit skeptical of the rating services these days, but be assured, there aren’t any toxic mortgages mixed in with the municipal bonds. Not even in Harrisburg.

(Spotted at Anchor Rising.)





3 comments

  1. hatless in hattiesburg »

    6 June 2010 · 8:08 pm

    having family ties to the texas panhandle, i wonder if littlefield it still paying off its amazingly ill-advised 70’s “urban renewal” scheme, where they replaced half the downtown parking with concrete planters and benches.

    http://farm3.static.flickr.com/2413/2503896926_bb487f8c1a.jpg?v=0

    http://www.whatdubhghalldoes.org/Littlefield%20Postcards/DowntownLittlefieldModernBankFront.jpg

    http://www.whatdubhghalldoes.org/Littlefield%20Postcards/LfdDowntownNightFront.jpg

    ughhh.

    i have vague childhood recollections from before that blight, like buying plastic models from the perry’s 5&10, having to try on clothes at anthony’s and penney’s, and getting a haircut with dad and/or granddad just around the corner.

  2. CGHill »

    6 June 2010 · 8:21 pm

    So far as I can tell, Littlefield’s problems are more recent: they went into debt to build a private prison, which was ultimately closed after a series of scandals that left it with no, um, customers, and they can’t service that debt and still maintain city services.

  3. hatless in hattiesburg »

    6 June 2010 · 11:21 pm

    ah, interesting. thanks for finding that link.

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