Atlantic City, N.J., avoids default on bond payment
Source: Reuters
Atlantic City, N.J., avoids default on bond payment
By Hilary Russ
May 2, 2016
ATLANTIC CITY, N.J. (Reuters) - Atlantic City, New Jersey's cash-strapped gambling hub, avoided a default on Monday by making its $1.8 million debt service payment, Mayor Don Guardian said.
The city is nearly insolvent and could soon run out of money. It has lost nearly 70 percent of its property tax base since 2010 as casino values plummeted because of competition from neighboring states.
"If we didn't make our bond payment it would be detrimental (to everyone), including us," Mayor Don Guardian said at a press conference. "This would reduce the ratings for everybody else in the state of New Jersey."
The state has a strong history of supporting its local governments. None has defaulted since the Great Depression.
The city sold the bonds at issue in 2012 to fund judgments it lost to casinos for property tax appeals. Tax-exempt serial maturities from 2023 through 2032 are insured by Assured Guaranty Municipal Corp.
Read more: https://www.yahoo.com/news/atlantic-city-n-j-avoids-default-bond-payment-162803302--business.html?nhp=1
