CHICAGO – Standard & Poor’s said in a special report Wednesday that its B rating on Detroit’s limited-and unlimited-tax bonds remains unchanged following an Ingham County, Mich., Circuit Court judge’s dismissal of a lawsuit challenging the city’s consent agreement with Michigan.
The court’s action frees up escrow funds controlled by the state, which in turn will allow the city to make a bond payment due on Friday. The city had said that without the funds, it would miss the payment owed on outstanding pension obligation certificates, and the state had warned that the pending lawsuit jeopardized the release of funds.
“Because the suit was dismissed, Standard & Poor’s expects payment to be made this Friday. Standard & Poor’s will continue to monitor the situation and take rating action as necessary should there be a change to the city’s credit quality and-or its ability to make debt service payments,” analysts wrote.