DETROIT - The Public Lighting Authority of Detroit (PLA) completed the sale Friday of $60 million in bonds to fund the initial phases of its plan to restore reliable street lights to the city of Detroit.
The sale is the first step of a two step process which will eventually see the sale of approximately $150 million in bonds to fund the redesign and re-establishment of the city's street lighting system.
"The sale of these bonds means we will be able to continue uninterrupted our work to restore reliable street lights to the City over the next three years," said PLA Executive Director Odis Jones. "Last week's ruling by U.S. Bankruptcy Judge Steven Rhodes paved the way for this sale."
The bonds were issued to the Michigan Finance Authority (MFA), which in turn sold them to Citibank. By statute, the PLA can only issue bonds through the MFA.
Jones said the PLA will begin work immediately to begin the second phase of bonding, which will see the sale of approximately $150 million in bonds. Those bonds will be used to pay off the initial bonds sold Friday as well as providing additional funds to finish the street lighting project.
"The final amount of the second bond issue will depend on the bond rating they receive, but our expectation is that it will be around $150 million," Jones said.
The bonds will be paid off with proceeds from a portion of the City utility tax. The law passed by the Michigan Legislature in December 2012 creating the Public Lighting Authority also directed $12.5 million in city utility tax annually for the purpose of paying of bonds that are issued. A ruling issued the previous Friday by U.S. Bankruptcy Judge Stephen Rhodes assures that those funds will not be affected by the city of Detroit's bankruptcy filing.
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