Tuesday, March 17, 2009

DWSD, Detroit Seek to Remarket Debt

The Bond Buyer reports (here) "Detroit today [March 17, 2009] will begin to remarket $120 million of variable-rate, A-rated water revenue debt into a fixed-rate structure - the first time the city has entered the market since all three rating agencies downgraded its general obligation debt into junk-bond territory. "

The City will begin remarketing another $300 million of varible-rate sewer debt into fixed-rate debt within two weeks.

The article notes that most of the bonds are bank bonds, and that Detroit enters the market under a certain amount of "liquidity pressure." Detroit must remarket these bonds before April 1, 2009 or face the start of an accelerated five-year amortization.

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