Fitch Ratings said yesterday that it is keeping Detroit’s water and sewerage revenue bonds on a watch list for potential ratings downgrades amid ongoing uncertainty about the city’s unfolding restructuring process, Reuters reported yesterday. A proposal to creditors by the city’s emergency manager last month called for a potential debt exchange that could shortchange some bondholders, although Fitch said there is no apparent legal basis to compel such an exchange. It added that the debt would have “substantial protection” in the event Detroit were to file what would be the biggest chapter 9 municipal bankruptcy ever.
