Printer Friendly

DETROIT'S 'Baa' BOND RATING CONFIRMED BY MOODY'S, CITY AT CRITICAL JUNCTURE

 DETROIT'S 'Baa' BOND RATING CONFIRMED BY MOODY'S,
 CITY AT CRITICAL JUNCTURE
 NEW YORK, Nov. 22 /PRNewswire/ -- Effective today, in conjunction with the city's sale of $39,875,000 general obligation bonds (unlimited tax) Series 1991, expected next week, Moody's Investors Service has confirmed the general obligation bond rating of the city of Detroit at "Baa," but stressed that credit position has reached a critical juncture.
 City financial operations continue to deteriorate reflecting a fundamental and widening fiscal imbalance. Unrealistic budget assumptions and the continued weakening of the city's economy contributed to a significant fiscal 1991 general fund operating deficit, eliminating the remainder of the city's Budget Stabilization Fund balance. For the current year, general fund operations are forecast to result in yet another sizable deficit, the fourth consecutive year of operating imbalance. To date, deficit operations have been sustained by the use of balances in the Budget Stabilization Fund and, more recently, one-shot revenue actions such as the $54 million received from the sale of the city's resource recovery facility. During this time the city has not identified measures which would result in sustainable and recurring operating balance. Credit position is now critically different than in the recent past, in that the current year's deficit and the previous exhaustion of all fiscal reserves renders imperative the near term implementation of a plan to restore balanced operations.
 City officials are looking to a specially appointed mayoral committee, similar to that used a decade ago, to identify options and recommend solutions for restoring fiscal stability. However, the committee has not yet been named, and with no readily apparent substantive options, it appears likely that the city will need to resort to interim borrowing during the spring, for the first time since 1985, in order to maintain basic operations. Moody's is of the opinion that the development of a well-defined, credible and achievable plan to restore and sustain balanced operations must be prerequisite to any short-term borrowing if the city is to maintain an investment grade bond rating.
 Unlimited tax general obligation bonds outstanding: $286,640,000.
 -0- 11/22/91
 /CONTACT: Paul Devine or Charles A. Kishpaugh of Moody's, 212-553-0350/ CO: City of Detroit ST: Michigan IN: SU: RTG


TS-CK -- NY048 -- 6411 11/22/91 13:01 EST
COPYRIGHT 1991 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Nov 22, 1991
Words:376
Previous Article:MARATHON GROUP DRILLS SUCCESSFUL DELINEATION TO SOUTH PASS 87 DISCOVERY
Next Article:SCOTTISH HERITABLE REPORTS THIRD-QUARTER PROFIT


Related Articles
MOODY'S ASSIGNS MIG 2 TO JERSEY CITY, N.J., NOTES; 'BAA' RATING CONFIRMED ON CITY'S LONG-TERM DEBT
DETROIT MAYOR YOUNG RELEASES STATEMENT ON MOODY'S INVESTORS SERVICE GENERAL OBLIGATION BOND RATING
MOODY'S CONFIRMS 'Baa' RATING ON CAMDEN, N.J.'S UNENHANCED GENERAL OBLIGATION DEBT
MOODY'S CONFIRMS WATERBURY, CONN. GENERAL OBLIGATION BOND RATING
MASSACHUSETTS MUNICIPAL WHOLESALE ELECTRIC COMPANY 'BAA1' POWER SUPPLY SYSTEM REVENUE RATING CONFIRMED; INITIALLY ASSIGNED IN JAN. 1992
MOODY'S REVIEWS HOSPITAL RATINGS IN MICHIGAN
SECOND QUARTER 1992 DOWNGRADES EXCEED UPGRADES FOR HOSPITALS BONDS
MOODY'S INVESTORS SERVICE REVISES THE CITY OF DETROIT'S GENERAL OBLIGATION UNLIMITED TAX BOND RATING TO 'Ba1' from 'Baa'
MOODY'S DOWNGRADES FLINT, MICH., GENERAL OBLIGATION UNLIMITED TAX BOND RATING FROM 'Baa1' TO 'Baa'
Detroit Debt Upgraded by Moody's

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters