Moody's cuts 38 Studios bonds, may cut Rhode Island debt rating

June 17 Mon Jun 17, 2013 4:57pm EDT

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June 17 (Reuters) - Moody's Investors Service on Monday downgraded the rating on $75 million of Rhode Island Economic Development Corporation's Job Creation Guarantee Program by three notches to Baa1 from A2, and put Rhode Island's debt under review for possible downgrade.

The decision, which affects $2 billion of outstanding state debt including, reflects "the uncertainty surrounding the state legislature's willingness" to appropriate funds requested to replenish the capital reserve fund for the 38 Studios bonds.

"Without replenishment, the reserve fund will be insufficient to make the interest payment due on May 1, 2014," Moody's said in a statement.

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