Reports that Fitch Ratings has come to an opinion on the rating for the Michigan Strategic Fund's upcoming limited obligation revenue bonds series 2014A (Events Center Project) are erroneous, the agency said in a release.
Fitch expects to complete its review within the next several weeks. Under review, are the bond documents and other information provided by the Detroit Downtown Development Authority (the bonds' obligor). The review will determine the new bonds' rating and their impact on what Fitch understands will be parity debt, tax increment bonds (Development Area No. 1 projects) series 1998C. Fitch currently rates those bonds BB with a stable outlook.
To date, the information provided to Fitch indicates that many of the credit characteristics of the bonds will change, including the revenue sources subject to capture for debt service, the bonds' maturity schedule, and the magnitude of outstanding debt. In addition, it is anticipated that senior lien debt will be refunded, potentially changing the flow of funds. Therefore, the existing rating may not reflect the rating of the series 2014A bonds.
After fully reviewing all relevant information, Fitch expects to assign a rating to the Michigan Strategic Fund bonds and incorporate that review into any remaining parity bonds Fitch currently rates.
