Detroit financial reserves earn city credit boost by Standard & Poor's
Detroit — The city's strong financial reserves and recent return to the bond markets for capital investment have earned it a credit rating boost, according to a Thursday report from Standard & Poor's.
The credit-rating agency bumped up the city's underlying credit rating to BB- from B+, saying Detroit is positioned to absorb increasing pension commitments and debt service payments as well as possible revenue setbacks while sustaining a balanced budget and funding reserves, noted S&P Global Ratings credit analyst John Sauter.
The report also cites the city's December return to the markets for capital borrowing as a "significant stabilizing factor" in its financial trajectory.
"Detroit is demonstrating ability to meet its budget demands, while also providing a strong reserve cushion against unexpected events or stagnating revenues," the report notes. "The city is experiencing good economic growth (though mostly centered in the downtown area) and population declines are moderating. At the same time, it continues to post budget surpluses, grow reserves, and meet objectives as defined in the (bankruptcy) Plan of Adjustment and subsequent planning documents."
Read more: https://www.detroitnews.com/story/news/local/detroit-city/2019/02/07/detroit-earns-credit-boost-standard-poors/2800958002/
