Detroit’s Bond Rating Goes From ‘Junk’ To ‘A/Stable’

DETROIT (AP/WWJ) – Standard & Poor’s has boosted Detroit’s rating on 8- to 15-year bonds that the city plans to sell to improve public services.

The revenue bonds have been given an “A” rating by S&P, which also gave Detroit a “B” issuer credit rating. Both have stable outlooks.

City officials said Wednesday that the better rating could get Detroit a lower interest rate and save $20 million in interest over the life of the bonds.

The $245 million bonds are backed by city income tax revenue and were part of Detroit’s bankruptcy exit financing. They will be issued by the Michigan Finance Authority and pay for — among other things — blight removal and public safety improvements.

“When you’ve lost your financial credibility over many years, you have to rebuild it one step at a time, and today is a big step,” Duggan told the Detroit Free Press.

S&P in 2009 lowered its rating of Detroit’s bonds to junk status.

News of the credit upgrade comes just as Duggan has returned from a trip to Japan, where he tried to drum-up some new business for the city.

“I think..they were great meetings,” Duggan said. “You don’t reverse decades of a trend in one visit, but I think we’ve started.”

Duggan’s trip and the improved bond rating comes just seven months after the city exited Chapter 9 bankruptcy.

TM and © Copyright 2015 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2015 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.

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