N.J. governments face risk on ‘backup’ debt, Moody’s says
New Jersey local governments may be exposed to more credit risk as they guarantee the debt of other entities, a strategy that led to default in Harrisburg, Pennsylvania, Moody’s Investors Service said.
Local governments that pledged their full faith and credit to guarantee the general-obligation debt of enterprises and other municipalities was 7.9 percent of all Moody’s-rated New Jersey local-government issuance in 2008. In 2011, that figure increased to about 29 percent, Moody’s said in a report today. (Young and Chang, Bloomberg)