Moody’s Investors Service raised its rating for Detroit’s debt, moving the city one step closer to investment grade in its latest stride since filing for bankruptcy in 2013, Bloomberg News reported. The credit rating company upgraded Detroit’s general obligation debt, which is backed by the city’s full faith and credit, one notch from Ba3 to Ba2 on Wednesday. Detroit has roughly $2 billion in debt outstanding, but its financial outlook remains positive given how the city has managed through challenges after emerging from court protection in 2014, Moody’s said. “The upgrade to Ba2 reflects the city’s healthy financial position supported by strong management that has successfully navigated challenges, such as weak property tax wealth, volatile revenue structure and limited revenue raising flexibility,” the Moody’s report said. Last year the city sold $175 million of bonds to finance a blight removal plan that began in the immediate aftermath of its emergence from court protection. That deal was just the third backed by the city’s creditworthiness since its bankruptcy and its first social bond offering.
