Moody's Investors Service announced it would review "for possible downgrade" the credit ratings of five states, including Maryland, that could be hit particularly hard if Congress fails to raise the nation's debt limit by the Aug. 2 deadline and defaults on its financial obligations.
A downgrade would have a significant impact on interest rates. The Moody's warning came days before Maryland plans to borrow $718 million for school construction and to refinance old debt.
Maryland State Treasurer Nancy K. Kopp, who will oversee that bond sale, said she expects it to take place as scheduled. But Kopp reiterated that state officials will keep a close eye on interest rates and could back out of the sale, which begins Friday, if necessary.
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