November 1, 2012 / 3:04 PM / in 5 years

Moody's says Sandy will test municipalities' liquidity

NEW YORK (Reuters) - Massive storm Sandy might put strains on the liquidity of some municipalities facing unbudgeted costs related to clean-up and repairs, Moody’s rating agency said on Thursday.

Men stand near a boat which was pushed inland near destroyed homes in Brighton, New York on October 31, 2012. REUTERS/Adrees Latif

The Wall Street ratings agency said that although the track record of recovering from natural disasters is “extremely strong” for U.S. municipal issuers, there are risks.

Up-front clean-up costs may exceed budgeted contingencies, aid from higher levels of government could be delayed and insurance reimbursement could arrive too late, it said.

Reporting by Tiziana Barghini; Editing by James Dalgleish

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