Standard & Poor's Ratings Services said Wednesday that its long-term ratings on various parity bonds issued by and for the city of Miami (BBB/negative GO rating) are not immediately affected by the city's receipt of a "Wells Notice" from the Securities and Exchange Commission (SEC).
The notice serves as notification that the SEC intends to recommend civil fraud charges against the city and that it may seek a permanent injunction, civil penalty, and an order commanding the city to comply with the 2003 cease and desist order.
S&P said it will continue to track these developments and will take rating action based on its published criteria. Based on conversations with management, S&P said it is not able to clearly determine what the financial implications could be.
However, downward pressure exists, and the rating is on negative outlook, which continues to reflect this ongoing issue as well as other downward pressures on the city's ratings, including its decreasing revenues, low financial position, and continued fixed cost pressures.