Finance partner Les Jacobowitz was recently quoted by Turnarounds & Workouts for an article that focuses on the rating agency’s mid-August report that raised several red flags for municipal investors. The article predicted more municipal bankruptcies and defaults in California. The ratings agency also announced that it had cut the credit ratings of 15 of the world’s leading banks, many of which provide backing for some types of municipal debt.

Mr. Jacobowitz said "the downgrade of big banks could not only increase their borrowing costs, but also diminish the amount of liquidity that they can provide on notes and bonds. The impact could be significant. Municipalities that issue debt backed by letters of credit from the affected banks could see the cost of that financing rise at a time when they, the municipalities, can least afford it."

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