Fitch Ratings said it affirmed and removed from Rating Watch Negative the B ratings on Wayne County, Mich.'s $186 million limited tax general obligation (LTGO) bonds issued by Wayne County; $51.3 million building authority (stadium) refunding bonds, series 2012 (LTGO) issued by Detroit/Wayne County Stadium Authority; $200 million building authority bonds issued by Wayne County Building Authority; and Wayne County unlimited tax general obligation (ULTGO) (implied).
The rating outlook is stable.
LTGO bonds issued by the county carry the county's general obligation ad valorem tax pledge, subject to applicable charter, statutory and constitutional limitations.
Stadium authority and building authority bonds are backed by lease payments from the county to the respective authority. The obligation to make the rental payments is not subject to appropriation, setoff or abatement for any cause, and carries the county's LTGO pledge.
Removal of the Negative Watch reflects elimination of the immediate uncertainty of which path the county might choose under Act 436. The county recently entered into a consent agreement with the state under Act 436 that affords to the county's executive and legislative branches many, but not all, of the emergency manager powers and which may improve expenditure flexibility.
The B rating reflects the county's substantial financial challenges which have resulted in persistent structural and accumulated deficits. Previous lack of significant revenue or expenditure flexibility has hampered efforts to address the imbalance.
