Atlantic City, N.J. received a 60-day extension on a $40 million state loan that was due March 31.
Monday’s extension comes after the city’s emergency manager released a report that suggested bond restructuring as one possible solution to boost the city's struggling finances.
The city's revenue director, Michael Stinson, said Atlantic City has been working with the state for the last month to get more time for the loan payment. The state provided Atlantic City with the $40 million emergency loan after the city delayed a $140 million bond issue last November.
On March 25, Atlantic City Emergency Manager Kevin Lavin released a report laying out plans to cut expenses by $10 million in 2015 in an effort to get the seaside city, which has a projected budget gap of $101 million, back on financial track. The 60-day interim report urged "shared sacrifice" among Atlantic City stakeholders including the possibility of extending maturities and exploring refinancing opportunities for bondholders.
"It's a first step," said Stinson of the emergency manager report. "Things are moving forward."
Moody's downgraded Atlantic City's $344 million in general obligation debt six notches to Caa1 from Ba1 on Jan. 23 after New Jersey Gov. Chris Christie appointed Lavin as emergency manager for the longtime gambling hub. Standard & Poor's lowered its Atlantic City rating four notches to BB from BBB-plus.
