California's Stockton rating cut to default: S&P Wed Jun 27, 2012 3:22pm EDT (Reuters) - The credit rating for Stockton, California was cut to default (D) from selective default (SD) by Standard & Poor's on Wednesday, which cited expectations that the city will not pay "substantially" all of its obligations as they come due. S&P Credit Analyst Chris Morgan, in a statement, added: "We understand the city plans to file for bankruptcy protection under Chapter 9 of the U.S. Bankruptcy Code." A bankruptcy filing by Stockton, a city of nearly 300,000 in the state's Central Valley, is expected as soon as Wednesday. The city has $700 million of outstanding debt. Reporting by Joan Gralla; Editing by James Dalgleish