Crain’s Detroit Business: Moody’s upgrades Detroit’s credit rating for 2nd time in as many years
The city of Detroit had its bond rating upgraded by the credit rating agency Moody’s Investors Service, its second upgrade in two years.
In issuing its upgrade, Moody’s said Detroit “is well positioned to manage its rising pension contributions for at least the next few years.” . . . “The outlook is positive because of ongoing strengthening of the city’s financial operations including robust revenue growth and increasing reserves,” the agency said. . . . In a statement, Mayor Mike Duggan said CFO Jay Rising and Detroit’s financial team have done a “fantastic job” of managing the city’s finances since its 2014 exit from bankruptcy. Another upgrade, he said, would put the city in a category that could draw investors. “Going from bankruptcy and state financial oversight to being within striking distance of an investment grade rating in less than 10 years is a tremendous accomplishment,” he said. . . . “This latest upgrade by Moody’s is significant evidence of the City’s continuing fiscal recovery that has been marked by multiple years of balanced budgets and a growing tax base,” [Rising] said. “We believe we’ve earned investment grade credit and will continue our strong fiscal management while carrying out the job and economic growth strategies of the administration in partnership with City Council.” . . . “Detroit remains, in our view, on a trajectory to meet increasing pension costs in the near and long term within a balanced budget framework, and if it does so, we could raise the rating,” S&P said in 2022. “We feel the city has fiscal discipline and flexibility that can keep it on track should it experience economic slowdowns or higher-than-forecasted pension increases.”
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