Moody’s Investors Service adjusts outlook on Detroit’s debt
DETROIT (AP) — The outlook on Detroit’s debt has been upgraded from “stable” to “positive” by Moody’s Investors Service.
The adjustment means the city’s finances are pointing in a positive direction and there is a higher chance the city will be upgraded in the next year or two, Moody’s said in a news release.
The rating and new outlook applies to $135 million of general obligation debt. Moody’s affirmed the city’s Ba3 bond rating and added that the rating remains three notches below investment grade.
Moody’s said the revised outlook reflects the city budget’s ability to finance service improvements, capital investments and accommodate an increase in pension contributions.
Moody’s upgraded Detroit in 2018 to Ba3 with an outlook of “stable.” The city faced $14 billion in long-term debt and a $327 million budget deficit in 2013, when it became the largest city in the nation to file for bankruptcy.
The city emerged from bankruptcy in December 2014, having restructured or wiped out $7 billion in debt.
“While we’re making extensive progress, we have to continue to plan for financial contractions and set-aside funds for our pension obligations while making investments that improve quality of life in the city,” said David Massaron, Detroit’s chief financial officer.