Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Rhode Island on Negative Watch by S&P on 38 Studios Default Risk

May 12 (Bloomberg) -- Rhode Island’s credit rating may be downgraded, Standard & Poor’s said, reflecting lawmakers’ debate about repaying debt that lured former Red Sox pitcher Curt Schilling’s failed video-game company.

S&P also cut the rating on bonds tied to 38 Studios LLC, by three levels to BBB, or two steps above junk. The securities were issued in 2010 by the Rhode Island Economic Development Corp., and the video-game maker filed for bankruptcy two years later. The state’s general-obligation rating is AA, third-highest.

The move comes three days after a state-commissioned report found that skipping payments on the moral-obligation bonds would cost Rhode Island its investment-grade rank. Interest costs on state debt would rise at least $36 million, and by as much as $362 million over the life of the bonds, Minneapolis-based SJ Advisors LLC said in the study.

“If Rhode Island were to fail to support any of its debt, we would likely take negative rating action, lowering G.O., appropriation, and moral obligation debt by multiple notches,” S&P said in today’s report.

To contact the reporter on this story: Brian Chappatta in New York at bchappatta1@bloomberg.net

To contact the editors responsible for this story: Stephen Merelman at smerelman@bloomberg.net Mark Tannenbaum

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.