Oakland County Executive L. Brooks Patterson says he has been expecting Detroit's Chapter 9 filing for some time now.
"There are two schools of thought. I'm the optimist, so I'll go for the second school. The first school is that Moody's and Standard and Poor's a number of years ago said if Detroit goes bankrupt we're going to drop your bond rating from AAA to AA+ which will cost you someplace between $2 million and $3 million more in interest payments as you fund these projects," Patterson said. "The other school says, well, Detroit, unless they shed all that debt through the Chapter 9 filing, you really are out of the woods."
Oakland County's bond rating would remain intact. Patterson hopes it's going to be that latter school of though.
The bottom line is Oakland County has been a stand-alone economy for decades. Does the county run the risk of taking a hit simply due to proximity? The short answer is yes.
Macomb County is in the same boat. It also has that coveted AAA bond rating which means not only do financial entities want to loan the county money but it also gets the best terms available.
Macomb County Executive Mark Hackel also has been anticipating Detroit's Chapter 9 filing.
That may be the biggest sell of all. Finally, reduce the crushing debt and bring some real financial stability to Detroit. For the Oakland and Macomb executives, that is a selling point. They're ready to fight any blowback from this filing.
"We'll go to Wall Street and say, 'Hey, no, no, no. Look at us versus Detroit. We're not Detroit. We may be a neighbor, but we're a stand-alone economy," said Patterson.
What's the likelihood both counties escape without a downgrade? Better than 50/50.
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