Detroit recovery plan a negative for bondholders-Moody's

Thu May 16, 2013 11:15am EDT

May 16 (Reuters) - A financial recovery plan released on Monday by a state-appointed emergency manager running Detroit has negative consequences for the city's bondholders, Moody's Investors Service said on Thursday.

"The plan is negative for Detroit bondholders because it indicates that the city requires 'significant and fundamental debt relief' to help shore up its finances, a clear indication that a default or bankruptcy is a real option," the credit rating agency said in a report.

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