The Aaa ratings of Bergen, Morris, Monmouth and Union counties have been put on review for possible downgrade by Moody’s Investor Services.
The potential ratings action is the result of an earlier decision by the agency to place the Aaa rating of the United States under review for potential downgrade. According to a release from the agency, the review reflects Moody’s assessment that some Aaa public finance ratings would likely be indirectly affected by potential credit deterioration of the U.S. government.
That downgrade could happen as soon as Tuesday if Congress and the President fail to come to an agreement on raising the country’s debt ceiling. Failing to raise the debt limit could result in an unprecedented default on U.S. Treasury bonds.
“In the event the U.S. government’s Aaa rating is downgraded, Moody’s will determine the outcome of each review by evaluating the strength of the sovereign linkages to each affected credit, including direct and indirect reliance on federal spending, sensitivity to deteriorating macroeconomic conditions and vulnerability to disruptions in the financial markets,” Moody’s said in a release announcing the review of 177 Aaa ratings across the country. “Moody’s will also consider positive credit attributes of each issuer such as financial position, operating flexibility and management responsiveness.”