Standard & Poor's Ratings Services has downgraded the city of Bell's bonds to junk status because of the city's inability to pay off a looming $35 million debt, it was reported today.
The lowering of Bell's bond ratings by five steps comes after a report on Saturday in the Los Angeles Times that the cash-strapped city has said it cannot meet the Nov. 1 payoff date on lease-revenue bonds it floated three years ago to buy surplus federal land for a rail shipping facility that never materialized, The Times reported.
Bell now faces possible foreclosure on the land near the Long Beach (710) Freeway, which was to have been leased to Burlington Northern Santa Fe Railway.
The city's plan for the property fell apart in 2008 after Bell officials failed to conduct basic environmental reviews.
The city is behind in its payments, and has told the bondholder that it cannot meet its obligations.