Moody's cuts Detroit academy rating to Ca from Caa2

October 8, 2013

Oct 8 (Reuters) - Moody's Investors Service on Tuesday downgraded the rating on the Detroit Academy of Arts and Sciences to Ca from Caa2, citing the charter school's recent default on its bonds.

"The downgrade to Ca incorporates both the academy's October 1, 2013 default and the expectation that bondholder recovery is unlikely to exceed 65 percent of the net present value of remaining debt service payments, based on enrollment and revenue trends," the rating agency said in a statement.

Moody's said its outlook remains negative on the lower rating for the academy, which has $26.2 million of outstanding debt.