Detroit's post-bankruptcy debut in the U.S. municipal bond market yesterday resulted in hefty yields for $245 million of bonds, signaling that investors remain skeptical of the city's recovery, Reuters reported yesterday. While the city, which exited the biggest-ever U.S. municipal bankruptcy on Dec. 10, received a lower than expected overall rate on the bonds, it paid a penalty for its trip to federal bankruptcy court. Tax-exempt bonds totaling $134.7 million were priced at par with a top yield of 4.50 percent in 2029. That resulted in a spread over Municipal Market Data's benchmark yield scale for top-rated bonds of 194 basis points. The yield on the A-rated bonds was also 133 basis points over MMD's single-A scale. Nearly $110.3 million of taxable bonds maturing in 2022 were priced at par with a 4.60 percent coupon — a 300-basis-point spread over comparable U.S. Treasuries, according to the deal's pricing scale.
