CHICAGO — Standard & Poor's said it would wait to see the terms of Wayne County, Mich.'s consent agreement with the state before taking any action on the already junk-rated county.
The ratings agency made the comment Thursday, the day the county board opted to enter into the consent agreement, one of four options allowed for governments that the state has declared to be in a financial emergency. Other options include an emergency manager, bankruptcy or neutral evaluator.
"Although the selection of a consent agreement removes some uncertainty and potential loss of autonomy that the appointment of an emergency manager could have created, the agreement's impact and ability to structurally rebalance the county remain uncertain until the plan is formalized and approved," S&P said in a comment. "Once the terms of the consent agreement are understood, Standard & Poor's will be better able to assess the short-term pressure facing the county and resolve the creditwatch."
The ratings agency put the county's BB-plus general obligation bond rating on creditwatch with negative implications on June 23, after county Executive Warren Evans requested state intervention and the declaration of a financial emergency.
The county is expected to spend up to the next 30 days negotiating the consent agreement with Michigan Treasurer Nick Khouri. The decree will provide a blueprint for the county's continued restructuring, which Evans has said is necessary to stave off insolvency by next summer.
S&P also said the county's ratings were unaffected by Gov. Rick Snyder's declaration of a financial emergency on July 22.
Evans and the county board said the consent agreement allowed for the continuation of local control while boosting the county's powers over labor contracts.
Wayne is rated junk by all three ratings agencies. Fitch Ratings rates it B with a negative outlook and Moody's Investors Service rates it Ba3 with a negative outlook.
The county has $336 million of limited-tax general obligation bonds and $654 million of unlimited-tax GO bonds.