CHICAGO - Credit analysts say they are closely monitoring the situation in Pontiac, Mich., as officials try to fend off an attempt by the state to take over the beleaguered city's finances.

Two weeks after Michigan Gov. Jennifer Granholm declared Pontiac to be in a state of fiscal emergency, Moody's Investors Service issued a release this week saying it was monitoring the city for any impact on its credit, which is already in junk-bond territory.

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