New York Mega Mall’s Muni Bonds Stave Off Default for Now

Municipal bonds tied to Destiny USA, the biggest shopping mall in New York state, will probably default, just not imminently, according to Fitch Ratings.

Fitch raised its rating Monday on about $260 million of municipal bonds, backed by payments-in-lieu-of-taxes, from C — the lowest category before default — to CC. The debt, issued to expand the Carousel Center mall in Syracuse into a super-regional shopping complex, will continue to be paid from net-operating income, the rating company said.

Destiny USA’s value has declined by 81% since 2014 as large tenants like JC Penney and Lord & Taylor ...