A major credit ratings agency warned Thursday that Detroit's preliminary financial operating plan opens the door to place bondholders on the hook for the city's debts, a move that would further damage the city's already low credit rating. The plan, released earlier this month contains "a clear indication that a default or bankruptcy is a real option" because it specifically notes that the city requires significant and fundamental debt relief to help shore up its finances, Genevieve Nolan, a Chicago-based analyst for Moody's Investor Service wrote in her report. "The recovery plan indicates that it will use a 'fair and equitable' standard to determine how to restructure payments for all stakeholders," Nolan concludes. "While not specifically defined in the recovery plan, this language has been used in relation to other bankruptcy proceedings to manage creditors' expectations on recovering their assets in bankruptcy, setting the stage for reductions to all stakeholders, including bondholders."