Detroit's bond rating improves from junk status
Seven months out of bankruptcy, Detroit today won a crucial vote of confidence in its ability to borrow as the credit-rating agency Standard & Poor’s rated as investment grade $245 million in bonds the city will soon sell to pay for upgrades to its police and fire departments and other critical public services.
S&P rated the bonds at "A/stable," considered an upper-medium grade and a significant improvement for a city whose ratings slid well into junk status as its financial condition careened toward collapse and with the nation’s largest-ever municipal bankruptcy filing in 2013. The sale is the city's first step toward rebuilding its credit-worthiness in the public bond markets.
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The city initially was to sell $275 million in bankruptcy exit-financing bonds but reduced the total by $30 million — the amount of savings the city received after court-ordered mediation lowered the fees charged to Detroit by law firms and others in the bankruptcy case.
Detroit expects to sell the bonds Aug. 19. The bonds will be issued by the Michigan Finance Authority but are backed by a pledge of revenue from the city’s income taxes.
S&P also rated the city's limited tax general obligation, or LTGO, bonds at “B-/stable," an improvement from the city's previous rating of “C.”
http://www.freep.com/story/news/2015/07/29/detroit-bond-rating-improves-post-bankruptcy/30731901/
