June 14, 2013 / 8:46 PM / in 5 years

Fitch downgrades Detroit debt on city plan to skip payment

June 14 (Reuters) - Fitch downgraded debt issued by Detroit on Friday after the city said it planned on skipping a payment on its pension debt to conserve cash.

Fitch said it cut Detroit’s $411 million in limited tax general obligation bonds to a C rating from double-C, its $202.8 million in unlimited tax GO bonds to C from triple-C, and about $1.5 billion in pension obligation bonds to C from double-C.

The ratings agency said the downgrade reflects that the city will not make a payment on its pension debt and follows a similar downgrade from Standard & Poor’s moments earlier.

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