PROVIDENCE, R.I. -- Moody's Investors Service has downgraded Rhode Island's 38 Studios bonds by two notches, from A2 to Baa1. At the same time, the bond rating agency has placed the rest of the state's debt, which totals $2.1 billion, under review for possible downgrade.
The action takes place as the state legislature is debating whether or not Rhode Island should pay the 38 Studios bonds.
Moody's said it took the action because of the "considerable uncertainty" surrounding the legislature's willingness to appropriate the funds requested in Governor Chafee's budget to pay off the bonds.
In a statement Monday, Chafee urged the legislature to appropriate the money. "I believe the General Assembly will do the right thing to protect the reputation and borrowing ability of Rhode Island," he said.