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.
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