Harrisburg’s new attitude towards GO debt

Nicole Gelinas writes at Public Sector Inc that Harrisburg, PA may simply choose to writedown some of the city’s incinerator debt to bondholders. The reasoning to paraphrase one city councilwoman, “they took an investment risk”. If this is the way the city intends to go, there are implications. Creditors now no longer should only consider whether the issuing authority is likely to have the money to pay back the bond, but whether or not they are willing to pay it back.