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A Sign of things to come : Credit ratings agency downgrades Collingswood to junk status
The credit ratings agency Moody’s has downgraded the borough of Collingswood to junk status, a drop tied to taxpayer underwriting of the LumberYard development on Haddon Avenue.
Collingswood dropped six notches, from A1 to Ba1. By contrast, the state of New Jersey was downgraded one notch by three credit ratings agencies this year.
Alan Schankel, managing director of Philadelphia-based Janney Capital Markets, called the downgrade “huge.”
As a practical matter, it’s a real black spot on their image and could make it difficult for them to borrow,” Schankel said. “I don’t think they’re necessarily going to default, but I can’t see a clear path to how they’re going to pay off their debt.”
According to the Moody’s assessment, the borough is a guarantor for a 2006, $8.5 million loan by LumberYard Redevelopment LLC, the residential and business development located off Haddon Avenue. (Roh, Gannett)