CHICAGO - Fitch Ratings late last week placed Detroit's BBB general obligation credit on negative watch, a move prompted by concerns that the city will be forced to make an estimated $400 million swap termination payment due to the loss of its investment-grade rating from another agency.

The Fitch action came late Thursday, two days after Standard & Poor's knocked its low investment-grade ratings on the city's unlimited- and limited-tax GOs to BB, two notches into junk bond territory, due to the city's deteriorating financial position. The move affected $2.4 billion of outstanding debt, including the city's $1.5 million of pension certificates sold in 2005 and 2006 through the Detroit Retirement Systems Funding Trust.

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