Moody's Investors Service downgraded the general obligation bonds of Atlantic City, New Jersey to "junk" status on Wednesday, citing the struggling casino town's declining tax base.
The credit rating service cut the city's underlying rating to "Ba1" from "Baa2." It affects $245 million in outstanding debt.
"The downgrade to Ba1 reflects the city's significantly weakened tax base, revenue-raising ability, and broader economic outlook," Moody's said in a statement, adding that its outlook remained negative.
By the end of August, potentially up to one-third of Atlantic City's casinos will have closed this year. Some reports suggest up to a quarter of the city's casino workforce will be put out of work as a result.
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