Moody's says Detroit bankruptcy could mean further downgrades

(Reuters) - Detroit's already low credit ratings could sink further if the city is allowed to file for bankruptcy, Moody's Investors Service said on Wednesday. The credit rating agency said a decision by the city's state-appointed emergency manager and Michigan's governor to authorize a Chapter 9 municipal bankruptcy filing would lead to a restructuring of Detroit's debt that could reduce or delay payments on its outstanding bonds. Moody's, which rates Detroit's general obligation debt deep in the junk category at Caa1 with a negative outlook, also said Detroit could be pushed into bankruptcy if interest rate swap agreements are terminated. While the termination of those agreements has already been triggered, negotiations are ongoing with the swap providers. A termination could cost the city as much as $440 million, or about 22 percent of its annual operating budget. read more at:http://www.reuters.com/article/2013/04/24/idUSL2N0DB1TJ20130424