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.)


  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.


    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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