Standard & Poor's Ratings Services said that it lowered its ratings on five CUSIPs of Detroit's outstanding sewerage disposal and water supply revenue bonds to D from CC, as indicated in a report dated Aug. 28, 2014.
All bond CUSIPs rated D are subject to what a distressed exchange, because some portion of each bond CUSIP was purchased below par pursuant to a tender offer, which was financed by the Michigan Finance Authority's (MFA) series 2014C and D bonds (MFA series 2014C and D bonds), and the bond CUSIPs were considered impaired for most of the duration of the tender invitation period that ended on Aug. 21, 2014.
The agency intends to assign a BBB-plus rating to the bond CUSIPs after closing of the MFA series 2014C and D bonds because at that point, the only outstanding portion of the bond CUSIPs will be the untendered portion not considered subject to a distressed exchange. This is the rating on both the MFA series 2014C and D bonds and other sewer and water revenue bonds issued by Detroit.
