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Ratings company Moody's on Tuesday slashed Puerto Rico's debt rating by three notches into even deeper junk status after the US territory passed a debt-restructuring law. Moody's Investors Service cut the rating to "B2" from "Ba2" and said the outlook was negative, indicating further downgrades were possible. Now dubbed the "Greece of the Caribbean," the archipelago is, like Greece, reeling under massive debt. Over the past decade, the commonwealth's debt has doubled to nearly $70 billion and investors are growing increasingly worried the government is running out of cash. In a bid for debt relief, the Puerto Rican authorities recently...

One has to be struck by the recent slew of rating agency credit upgrades for European sovereign bonds. Since the start of the year, undaunted by the marked deterioration in European political and economic fundamentals, the rating agencies have sheepishly followed the market's more favorable attitude towards Europe by providing the European countries with improved bond ratings. This has to raise question anew as to whether the rating agencies serve any useful purpose. Similarly it has to raise questions as to whether the rating agencies continue to amplify market movements in a pro-cyclical manner. Since the start of the year,...

Detroit's looming bankruptcy is making news again, this time focusing on current restructuring plans aimed to wipe out $18 billion in debt by axing pension checks of city retirees, including police and fire. Massive long-term retirement and healthcare promises were by no means solely responsible for the city's fall, but these massive pensions coupled with a tax base weakened by high unemployment and housing vacancies caused the budget to bleed out quicker. The Michigan city may be the most recent victim of bankruptcy, but many of the 61 largest U.S. cities have adopted the same retirement legacy leading to $118...

<p>A couple of proposed changes to President Obama’s health-care overhaul are drawing the attention of the credit evaluators at Moody’s Investors Service — and not in a good way.</p> <p>In a note to clients Thursday, the ratings agency targeted two proposals: One forcing insurers that offer plans on public exchanges to expand their network of doctors and hospitals, and the other allowing individuals to retain non-compliant insurance policies through the end of 2016.</p>

Major credit-rating firm Moody’s on Thursday downgraded the outlook for health insurers from stable to negative, citing the new health-care law’s botched rollout as a significant factor. Moody’s highlighted the relatively low sign-up rate among young adults and a slew of last-minute regulatory changes by the Obama administration as posing risks to health insurers selling policies on the new exchanges.

Another day, another dose of bad news for ObamaCare. On Thursday, Moody’s Investor Service announced it was downgrading its outlook for America’s healthcare insurance sector from “stable” to “negative,” due to ObamaCare. “While all of these issues had been on our radar screen as we approached 2014, a new development and a key factor for the change in outlook is the unstable and evolving regulatory environment under which the sector is operating,” Moody’s said. “Notably, new regulations and presidential announcements over the last several months with respect to the ACA have imposed operational changes well after product and pricing decisions...

Moody’s Investor Service has changed its outlook for the U.S. health care insurance sector from stable to negative, citing Obamacare’s rollout and the uncertainty it brings. The private credit rating agency said potential fallout from the Affordable Care Act’s implementation — including changes to the individual market and the impact of the law’s “employer mandate” on commercial group plans in January 2015 — presents the greatest challenge to health insurers’ credit profile. Lower reimbursement rates among Medicare Advantage plans also are creating financial pressure, it said.

Moody’s announced Thursday it was downgrading its outlook for health insurers from stable to negative based on uncertainty related to ObamaCare. The credit rating agency cited an unstable environment because of the healthcare law’s difficult rollout, and projected that insurers would earn two percent less than forecast in 2014. “While we’ve had industry risks from regulatory changes on our radar for a while, the ongoing unstable and evolving environment is a key factor for our outlook change,” Moody’s Senior Vice President Stephen Zaharuk said in a statement. “The past few months have seen new regulations and announcements that impose operational...

Scranton could be headed towards another fiscal crisis like the one that resulted in city workers having their pay cut to minimum wage in 2012... Moody’s warned investors that Scranton could be facing the threat of default or bankruptcy thanks to a $20 million budget gap for the fiscal year that begins Jan. 1. The city is supposed to approve a new budget by Nov. 15, which would have to close that deficit to balance the budget. ... A similar crisis hit the city in July 2012, which lead to Mayor Chris Doherty cutting all city workers’ pay to minimum...

Bob Woodward said that sequestration was Obama's & Lew's idea. Why now is Obama againt it? Why was he for it before he was against it? Why does he flip-flop on his CORE beliefs (raising the debt ceiling, the individual mandate, sequestration, etc)? Not secondary or tertiary beliefs...core beliefs. And why is Lew fearmongering over the debt ceiling? What he has said about it recently has been debunked by Moody's.

<p>One of the nation’s top credit-rating agencies says that the U.S. Treasury Department is likely to continue paying interest on the government’s debt even if Congress fails to lift the limit on borrowing next week, preserving the nation’s sterling AAA credit rating.</p>

Detroit’s bankruptcy and the problems facing its pension funds offer two important lessons to other communities. One is that state and local governments need to do a much better job managing retirement funds. The other is that they should not pre-emptively reduce hard-earned benefits at the first sign of trouble. Several state and local pension systems around the country are under serious stress. Not surprisingly the hardest hit retirement funds are in places devastated by global economic forces like Detroit, as well as inland cities in California like Stockton, which was battered by the real estate collapse and has also...

For all of the panicky rhetoric coming out of Chicago, one would think the school district is on the verge of financial collapse. Indeed, the Chicago Tribune recently published an editorial announcing that the financial emergency for CPS has arrived. That may very well be, but one would never know it from the proposed increase in spending of nearly 10 percent. Chicago Public Schools recently released a proposed budget of $5.6 billion for the 2013-14 school year. That’s up from $5.1 billion the previous year. The dramatic increase in spending is largely due to a $405 million employee pension payment...

Moody’s Investors Service late on Monday said that it considers Cyprus to have defaulted after the debt-stricken island country swapped some local bonds for longer-term bonds. The ratings agency, which does not use a “default” or “selective default” rating, said it will revisit Cyprus’s rating to assess the impact of the exchange on the sustainability of the nation’s debt burden. Other factors, including the likelihood that Cyprus will comply with the rest of the measures spelled out in its bailout agreement with the International Monetary Fund, the European Central Bank and the European Union, will be taken into consideration as...

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/b763a6f8-de91-11e2-b990-00144feab7de.html#ixzz2XhyE9i1y US states would need to raise $980bn to cover the aggregate shortfalls in their retirement schemes for public sector workers, according to an analysis of state obligations. Moody’s Investors Service, which provides credit ratings for states and municipalities, looked at the detailed financial accounts for each state and its schemes in the most recent financial year available. If all 50 states...

Moody’s Investors Service, dissatisfied with the way states measure what they owe their retirees, released its own numbers on Thursday, showing that the 50 states have, in aggregate, just 48 cents for every dollar in pensions they have promised. That is much less than the 74 cents on the dollar that the states now report, suggesting the states are short by about $980 billion, with many local governments, like school districts, being on the hook for additional billions that they have not disclosed at all. The disparity suggests that politically difficult steps taken recently by many states to fix their...

What about the ratings agencies? That's what "they" always say about the financial crisis and the teeming rat's nest of corruption it left behind. Everybody else got plenty of blame: the greed-fattened banks, the sleeping regulators, the unscrupulous mortgage hucksters like spray-tanned Countrywide ex-CEO Angelo Mozilo. But what about the ratings agencies? Isn't it true that almost none of the fraud that's swallowed Wall Street in the past decade could have taken place without companies like Moody's and Standard & Poor's rubber-stamping it? Aren't they guilty, too? Man, are they ever. And a lot more than even the least generous...

OCTOBER 17, 2009 Rajaratnam Surfaced in U.S. Terrorism Probe By EVAN PEREZ and MATTHEW ROSENBERG WASHINGTON—The hedge-fund billionaire charged as part of a vast insider-trading case surfaced in an earlier, separate probe into U.S. fundraising by a Sri Lankan terrorist group, people familiar with the probe said. As part of that investigation, federal agents said they uncovered documents showing that Raj Rajaratnam, founder of the Galleon Group, was among several wealthy Sri Lankans in the U.S. whose donations to a Maryland-based charity made their way to the Liberation Tigers of Tamil Eelam, according to people familiar with the probe. Raj...

Yes, on February 22nd Moody’s lowered the bond rating for UK debt from AAA to Aa1. The result between February 22nd and today? The yield curve for UK sovereign bonds has fallen. I compare the US Treasury yield curve over the same time period with the UK Sovereign curve. The US yield curve shows a much smaller decline which, of course, was not downgraded. Yet. The UK 5 year credit default swaps (CDS) has fallen from 51 on February 21st to 47.30 on March 1st. If you look at the time distribution of UK sovereign debt, they have a big...

NEW YORK (Reuters) - Moody's Investors Service on Friday cut the United Kingdom's credit rating to Aa1 from Aaa, citing weakness in the nation's medium-term growth outlook that it now expects to extend for a number of years. The outlook on the credit is stable, the firm said in a statement.