Atlantic City Credit Review Extended by S&P as Crisis Escalatesby
Mayor says city services will be halted without state deal
Political impasse seen having statewide consequences
Atlantic City’s credit rating remains on watch for a possible cut by Standard & Poor’s, which extended its review through June and said that the troubled New Jersey gambling hub is likely to default absent “an unforeseen positive development.”
The company cut the grade to CCC-, nine levels into junk, in January and said it could change it depending on actions such as bankruptcy or state intervention. While the city is making April 1 bond payments, it may be unable to meet May and June obligations, S&P said in a statement Friday.
The resort town may shut down non-essential services for three weeks starting April 8 as cash runs out. Governor Chris Christie and state lawmakers are bickering over legislation that would take over the city’s operations and allocate additional gambling funds to shore up its finances.
“The city’s fiscal future depends on extraordinary state support that is being significantly tested,” S&P said.
And an unrelenting political impasse would have consequences beyond Atlantic City: the analysts said it could “cause us to further evaluate our institutional framework for New Jersey local governments.”