S&P cuts Detroit bond ratings on expected default

June 14 Fri Jun 14, 2013 4:49pm EDT

June 14 (Reuters) - Standard & Poor's Ratings Services dropped Detroit's credit ratings to CC from CCC-negative on Friday, citing the city's expected default on outstanding pension debt.

Kevyn Orr, the city's emergency manager, released a restructuring plan that calls for a halt to debt service payments on unsecured debt, starting with a $34 million payment due Friday.

"Standard & Poor's rates an issue CC when we expect default to be a virtual certainty, regardless of the time to default," the credit rating agency said in a statement.

S&P, which just downgraded Detroit's ratings on Wednesday, also kept a negative outlook on the CC rating for the city's general obligation and pension debt due to the potential of a Chapter 9 municipal bankruptcy filing.