- State lawmakers approved loan as part of rescue package
- Mayor says city will approve once terms are finalized
Atlantic City is likely to default on $3.4 million of debt payments on Aug. 1 without an agreement with New Jersey on a $74 million bridge loan or other state action, according to Moody’s Investors Service.
Although state lawmakers had approved a loan as part of a rescue package in May for the distressed gaming hub, the terms are still being worked out between the state and city. Mayor Don Guardian told residents in a meeting Tuesday evening that city council would approve the agreement when it’s reached, according to a presentation on the city’s website.
"Absent receipt of state support, we believe a default would likely set off a series of missed debt payments and revive the prospect of the city filing for bankruptcy" or a restructuring, Moody’s said in a statement Wednesday.
Michael Stinson, the city’s revenue and finance director, didn’t return an e-mail requesting comment Wednesday. The city had previously said it would make financial obligations this week.
"We continue to work with the city to finalize the terms of the loan," Tammori Petty, a spokeswoman for the state’s Department of Community Affairs, said in an e-mail.