SAGINAW (AP) – Three governments in Michigan have pulled planned municipal bond sales off the market since Detroit filed for bankruptcy protection last month.
On Thursday, Saginaw County withdrew a roughly $61 million sale to cover pension obligations. Ahead of that decision, Genesee County withdrew a $54 million sale to finance a water and sewer work. And Battle Creek delayed a $16 million general obligation bond issue.
The decisions come amid concern that Detroit’s bankruptcy will make it more difficult for communities to borrow money.
Detroit owes billions to bondholders and billions more in pensions to retired city workers. In its bankruptcy filing, the city proposed trimming pension benefits and paying bondholders a fraction of what they’re owed. It also wants to treat retired city workers and bond investors as equals.
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