Standard & Poor's Lowers Stockton Rating to 'D'

Standard & Poor's said it has lowered its rating on Stockton, Calif., to D from "selective default." The agency said it also lowered the ratings to C from CC on pension obligation bonds, lease revenue bonds and certificates of participation backed by the city general fund. Standard & Poor's said it will keep a negative outlook on the ratings.

"The D reflects our view of the city's planned nonpayment of substantially all of its obligations as they come due," said Standard & Poor's analyst Chris Morgan in the report Wednesday, after the city made clear it plans to file for Chapter 9 bankruptcy this week.

In March, Standard & Poor's downgraded Stockton's rating for the third time in less than two weeks to selective default from CC.

It cut the issuer rating Wednesday to CC from BB, after dropping it the previous week from A-minus.

Standard & Poor's recently dropped the underlying rating on two Stockton water revenue bond issues by three notches to BB-plus amid the looming bankruptcy.

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