Detroit Finally Has Good Credit Again

Witnessing a financial revival, the City of Detroit has been upgraded to an investment grade status by Moody’s Investors Service, marking a significant milestone in the city’s recovery from the largest municipal bankruptcy in U.S. history in 2014. This upgrade, announced by Moody’s on Friday, elevates Detroit’s bond rating two levels from Ba1 to Baa2, accompanied by a positive outlook for the future. But the real question is, what does that mean? This monumental upgrade, which Mayor Mike Duggan announced today, signifies the first return to investment grade for Detroit since 2009, less than a decade after the city declared bankruptcy. Moody’s attributed this remarkable turnaround to “a decade of solid financial performance” and “strong governance practices,” underscoring a consistent track record of financial resilience and operational efficiency within the city’s administration. The report issued by Moody’s on March 22, 2024, commends Detroit for its impressive financial management and governance over the past decade, stating, “The upgrade…reflects Moody’s expectation that the city will continue to bolster its financial resiliency and maintain the track record of solid operating performance.” Furthermore, the report highlights the doubling of Detroit’s tax base valuation in the past five years and anticipates additional fiscal growth in...