July 23, 2012 / 8:55 PM / 7 years ago

Moody's cuts Compton, Calif. sewer enterprise rev bond rating

July 23 (Reuters) - Moody’s Investors Service said on Monday it cut the rating on sewer enterprise revenue bonds issued by Compton, California, to Ba1 from A2, affecting $4.9 million of debt.

The rating could be cut further into the junk category, the rating agency said in a statement.

The downgrade is primarily based on the city’s severe liquidity crisis, which raises the risk that the city could seek bankruptcy protection, according to the statement.

Compton, located 16 miles south of Los Angeles, may declare bankruptcy by September, according to c ity officials.

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