CHICAGO — Detroit hopes to come to market in early September with up to $100 million of federal capital grant-backed bonds to finance part of a light-rail system along the city’s main thoroughfare.

The junk-rated city would face a steep penalty to come to market using its own credit pledge, but the bonds will carry the backing of federal transportation grant dollars that have earned single-A ratings for other issuers that have used a similar structure.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.