Moody's Investors Service said Christie's comment, in an interview March 24 with an Atlantic City radio station, "provides another indication that the state is considering impairing the city's general obligation (GO) bondholders, whether through a negotiated debt restructuring or possibly a Chapter 9 bankruptcy filing."

A default would negatively affect the credit of cities such as Newark, Paterson, Salem, and Irvington, among others, Moody's said. The credit agency downgraded Atlantic City's general obligation debt rating this week, citing the possibility of a default this year and a political stalemate in Trenton.

“While the state has no legal obligation to support Atlantic City’s GO bonds, its historically strong support for local governments has bolstered the credit quality of financially weaker municipalities.”