Moody’s Investors Service said that Harrisburg, Pa., faces “significant fiscal distress” and possible default on a bond guaranty even after it sold and leased assets to clear a debt burden on an incinerator project, Bloomberg News reported yesterday. The state capital guaranteed a 1998 capital-appreciation bond sale by the city’s Redevelopment Authority, Dan Seymour and Geordie Thompson, Moody’s analysts in New York, wrote in a report released yesterday. Rental income from a downtown office building was supposed to back bond payments when they begin in 2016. That revenue won’t be enough, even though Pennsylvania officials last month signed a lease to place 900 state workers at the site, according to Moody’s. Harrisburg this year exited a state receivership brought on by a fiscal crisis stemming from an overhaul and expansion of an incinerator that didn’t generate enough revenue. In December, the community of about 50,000 cleared its debt load of $362.5 million by selling and leasing assets and winning concessions from creditors.
