In the latest installment of Muni Minute The Bond Buyer's 60-second video series that examines a top municipal market story that will impact the coming week we take a look at the state of Michigans upcoming $87 million GO bond sale. The deal may be small in stature, but with the Flint water crisis and insolvency of Detroit Public Schools hanging over the state like a dark cloud, long term fiscal health for the state is concerning and could impact the sale.
WEITZMAN: Despite its small power amount, Michigan's $82 million general obligation bond sale will be one of the most watched deals of the week. The state will take competitive bids on Tuesday in what marks its first deal of 2016 and it's coming with baggage on the heels of negative headlines like the Flint Water Crisis and the insolvency of Detroit Public Schools.
There's growing concern over the impact tackling both issues will have on the state's long-term fiscal health and credit.
The state's reserves are flush now, but cost estimates for Flint range from 700 million to 1.5 billion and federal help is uncertain. S&P's view of Michigan's positive momentum has dimmed, recently lowering the state's outlook to stable from positive. A restructuring of DPS is making its way through the legislature. It relies on a state bailout but Governor Rick Snyder says it's more affordable than a bankruptcy filing as the state could be on the hook for good chunk of the district's debt. What impact will these issues on the sale? We'll have to wait and see where the bids land. I'm Aaron Weitzman, and this has been your Muni Minute.