CHICAGO - A second Michigan government has delayed a bond sale amid concerns over fallout from Detroit’s bankruptcy.

Battle Creek, Mich. decided to postpone a $16 million general obligation bond deal set for this week.

The city’s finance director said as the sale date approached, borrowing costs appeared to be rising quickly amid lack of investor interest, which the finance team attributed to repercussions from Detroit’s Chapter 9 filing.

“We have every intention of going forward with this bond sale, but right now things are so volatile,” said Linda Morrison, the city’s finance director. “I think we have a good bond deal here, but with the buyers, I just don’t know what to expect.”

Battle Creek’s delay marks the second Michigan issuer to pull a deal since Detroit, the state’s largest city, filed for bankruptcy on July 18.

Genesee County pulled a $54 million deal last week, also due to lack of investor interest.

Detroit’s restructuring plan treats the city’s general obligation bonds, both limited-tax and unlimited-tax, as unsecured, a move that many say is spooking potential buyers of all local Michigan debt.

Hutchinson Shockey Erly & Co. is the underwriter on the Battle Creek deal, a $16 million GO limited-tax deal that was crafted in the spring as part of the city’s new budget.

The city and finance team set meetings with the ratings agencies in mid-July, which turned out to be just days after Detroit filed its historic bankruptcy filing.

“There was a lot of talking at those meetings about what was going to happen to the market and what impact Detroit would have,” Morrison said. “No one really thought it was going to have an impact, but obviously the market has reacted.”

The deal is currently on the day-to-day calendar though the team may postpone it for as long as a month, she said.

“We’re just watching the market,” Morrison said.

Saginaw County is still expected to come to market this week with a $60 million taxable pension obligation bond deal. The deal is tentatively set for Thursday.

A trader at Fifth Third Securities, the lead underwriter, said on Monday that preliminary investor feedback seems strong enough to support the deal, which by its taxable nature would appeal to a different set of buyers than the postponed tax-exempt transactions.

Battle Creek is rated Aa3 by Moody’s Investors Service, and AA with stable outlook by Fitch Ratings.

Its population is 52,000 and it’s located about 120 miles from Detroit. Moody’s revised the outlook to negative ahead of the planned sale, amid expectations that the local economy will continue to be challenged.

The city has $84.5 million of outstanding GO bonds.

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