The Nation : Moody’s Suspends Yonkers Bond Rating

The city of Yonkers’ financial peril deepened as Moody’s Investors Service suspended its bond rating on the second day of soaring fines imposed for the city’s defiance of a court order to desegregate housing in the Westchester County, N.Y., community. City officials, who have said Yonkers will be bankrupt within three weeks because of the fines imposed by U.S. District Judge Leonard B. Sand, tensely waited for a federal appeals court to rule on the city’s request to delay the fines while it appeals the judge’s contempt finding. The city had a bond rating of Baa, the lowest investment-grade rating, for its outstanding debt of $96.1 million, Moody’s said. Because the city is not currently in the market to borrow, the suspension means more to investors who may want to trade its outstanding bonds than to the city itself, a Moody’s spokesman said. Sand, meanwhile, held a fourth councilman in contempt and ordered him to pay daily fines of $500, retroactive to Tuesday, when the judge held the city and three other councilmen in contempt for refusing to adopt a desegregation plan.