DALLAS -- The general obligation limited tax bonds of 32 local governments in Michigan were upgraded one notch on the back of a ratings methodology change by Moody's Investors Service.
The credit ratings were previously notched once from the GOLT's respective public general obligation unlimited tax or equivalent issuer rating. Moody's ratings action removes the notch. All of the ratings are investment grade.
"The lack of notching reflects the nature of Michigan local governments' GOLT bonds, which carry a full faith and credit pledge and are a first budget obligation payable from any available funds," said the rating agency in a report.
This action concludes a review of Moody's U.S. Local Government General Obligation Debt Methodology on Dec. 19, 2016.
Michigan local governments are facing big expenditures as a result of the growing costs of infrastructure and healthcare spending. At the same time they have lost over $7.5 billion in shared revenue since 2002, even as the state's economy prospered.
One of the biggest costs local governments face, according to a report by the Michigan Municipal League, is legacy post-employment health and pension benefit commitments and aging infrastructure – both of which Gov. Rick Snyder raised in his State of the State address last month.