Mayor Mary C. Moran of Bridgeport, Conn., informed Moody's Investors Service late yesterday that the city plans to file for bankruptcy under Chapter 9 of the Federal Bankruptcy Code, and the rating agency suspended its ratings on the city as a result.
At stake are about $220 million of outstanding municipal bonds, rated Baa by Moody's before the suspension and rated BBB by Standard & Poor's Corp. Daniel M. Heimowitz, managing director at Moody's, said the agency had spoken directly with Mayor Moran and she informed them that she would file for protection.
The Moody's ratings on the insured bonds are not affected by the filing, and remain triple-A. AMBAC Indemnity Corp. has exposure to Bridgeport through a 1983 sale; Financial Guaranty Insurance Co. has exposure to a 1985 sale; and Municipal Bond Investors Assurance Corp. insured in 1991. The proportion of the insured debt was unavailable at presstime.
Mayor Moran had threatened the possibility of a Chapter 9 filing in early January, prompting a rush to sell the Bridgeport bonds. The mayor said at the time that it was her duty to consider the option. City officials could not be reached late yesterday for comment.