First public debt is issued in Michigan since Detroit bankruptcy
People are willing to loan money to Michigan public entities again: that's according to Brian O'Connor, the finance editor at the Detroit News.
O'Connor writes that when Ypsilanti Community Schools and the state sold bonds yesterday, it marked the "first time since Detroit filed for bankruptcy" that public debt was issued in Michigan.
From The Detroit News:
The successful offerings come after bond sales by Saginaw County, Genesee County and Battle Creek were scratched following Detroit’s July 18 municipal bankruptcy filing. Investors shunned new government debt originating in Michigan as soon Detroit’s state-appointed financial manager said he wouldn’t give bondholders their traditional — and expected — preference of being paid ahead of the city’s retired firefighters, police officers and other workers.
“We think Michigan should be punished,” said Tom Doe, CEO of Municipal Market Advisors, a Concord, Mass. municipal bond consultant. “The state is being irresponsible.”
The Ypsilanti bonds took a little ding because of the Detroit troubles, according to the report. O'Connor points out another test on the state's credit worthiness will be coming next week:
...when, according to Reuters, the Finance Authority is set to offer $92 million in school revenue bonds from an area that could be a much harder sell than Ypsilanti: the Detroit School District.