Biggest Mall in N.Y. Has Debt Rating Cut on Plunging Valuation

Municipal bonds tied to Destiny USA, the biggest shopping mall in New York state, were cut deeper into junk by Fitch Ratings after its value plunged well below the amount of its debts.

Fitch reduced the grade to C from CC on about $280 million of notes, indicating a default is probable. The bonds, originally issued to expand the Carousel Centerinto a super-regional shopping complex, are backed by payments in lieu of property taxes, or PILOTs. The mall’s owner, Pyramid Management Group, sends the payments to bondholders instead of the city of Syracuse.

Now known as Destiny USA, ...