For the first time since its bankruptcy, the Motor City issues stand-alone general obligation bond
Investors embraced Detroit’s first stand-alone bond sale since its historic bankruptcy, a sign many remain willing to lend to the city despite the lingering pain of losses from its restructuring.
The lure of higher yields from the below-investment grade debt outstripped concerns about the city’s troubled financial history, analysts said. Investors suffered losses on Detroit debt when it became the biggest U.S. city to ever file for bankruptcy in 2013.
The sale Tuesday marked the first time since bankruptcy more than five years ago that the city issued stand-alone general obligation bonds—those backed by its own full faith and credit. Those bonds hit investors with losses during Detroit’s restructuring, raising questions about the risks of what many had considered the safest form of state and local debt.
The Wall Street Journal
By Gunjan Banerji
Updated Dec. 4, 2018 5:40 p.m. ET