DETROIT – The City of Detroit received over $3 billion from investors in a return to the bond market on Thursday.
The money comes from 67 different investors, around 30 times more orders than the city needed for its Proposal N plan that will address vacant house through renovation and demolition. Proposal N originally needed $100 for the issue.
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Detroit priced $100 million in Unlimited Tax General Obligation Bonds, including $75 million in neiborhood-improvement bonds and $25 million for certain transportation and recreation projects.
An estimated 2,500 vacant homes will be demolished or renovated with the latest bond offering.
Investors took advantage of the country’s lowest inflation rate in over two years, and on Detroit’s highest investment rating in 14 years from S&P and Moody’s to make the $3 billion in orders.
“We are very pleased with the outcome of this pricing given the turbulent and high interest rate environment over the last year,” Detroit’s Chief Financial Officer Jay Rising said. “The fact that the City of Detroit was able to garner $3 billion of orders at a time when very few issuers with similar ratings are able to enter the market is a testament to investors’ belief in Detroit’s credit story and upward trajectory.”
S&P stated Detroit’s financial position and economy is the “strongest they’ve been in decades.”
The interest from Environmental, Social, and Governance focused investors allowed Detroit to prioritize bonds that support Proposal N’s sustainability goals and to lower costs for the city.