United bankruptcy could lead to ratings downgrade.

• Position: News Briefs

United Airlines' Chapter 11 bankruptcy filing could eventually lead to a credit rating downgrade on tax-exempt bonds issued for United's hub airports. Although the bankruptcy filing does not itself pose a default risk to airport bonds, Fitch Ratings pointed our that the airline's forced reorganization could put downward pressure on the bond ratings. This reorganization will likely entail service cutbacks at United hubs as the airline attempts to cut costs. Since the municipal bonds are revenue bonds, the cutback in service affects the bonds' revenue streams...