It is not time to panic despite the struggle of Detroit bondholders to regain their money, representatives of the four largest bond rating agencies told state treasurers Thursday.

Analysts from Moody's Investors Service, Standard and Poor's, Fitch Ratings, and Kroll Bond Rating Agency gave members of the National Association of State Treasurers an overview of their outlooks during the final day of the NAST's annual conference here. Some treasurers had expressed concern about the ongoing tension over whether holders of Detroit's bond debt will be made close to whole, or will have to accept major haircuts, could cause the rating agencies to downgrade local debt across the country. But the analysts urged them not to be hasty and pointed out reforms many states and localities are making to pension other post-employment benefit systems.

Robert Kurtter, a managing director at Moody's, said it is important to remember that bankruptcy and default are different things. A municipality can default on its obligations without declaring bankruptcy, and can likewise declare bankruptcy without defaulting on its obligations. Kurrter reminded conference attendees that it could take some time before Detroit's bankruptcy conclusion becomes clear, and that nobody should be too eager to assume Moody's will radically alter its rating methodology in the meantime.

"We are at the very early stages of this," he said. "It's a little premature, I think, to get too excited."

A federal bankruptcy court judge ruled Dec. 3 that the city is eligible for Chapter 9 bankruptcy and that the city's pensions can be adjusted. Kurrter said it is very notable from his agency's point of view that the long-accepted legal protections of bondholders are under assault in the Motor City, as it raises the question as to how secure such protections could be anywhere.

"The fact that you even had a constitutional pledge simply may not mean anything," he said.

Richard Raphael, a managing director at Fitch, agreed, calling the events "very troubling." Panelists impressed on NAST members that there is a wide range in how states approach troubled municipalities. Some take very aggressive action, imposing control boards and offering considerable resources for cities and counties in distress. Others take a more hands-off approach, and the rating agencies are mindful of whether a state is likely to be supportive of troubled municipalities.

And while the unfunded pension liability issue is a growing an nationwide problem, some reforms have been made, especially on other liabilities. A recent Standard and Poor's report on other post-employment benefits, or OPEBs, found that states have successfully shrunk their unfunded liabilities in recent years.

"We're seeing pretty meaningful reform across the liability area," said Standard and Poor's' Robin Prunty.

Kroll's Kate Hackett also said OPEB reform was coming along at a surprising pace.

"Faster than I expected," she said.

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