City of Detroit
Unlimited Tax General Obligation Bonds, Series 2021A&B
February 4, 2021
SWS was asked by the City to take the lead on the rating presentation and helped achieved an outlook upgrade from Negative to Stable for the City. The City’s Neighborhood Improvement Plan (NIP) is a long-range plan to address vacant houses in key neighborhoods throughout the City through rehabilitation or demolition to enhance property value, stimulate economic activity and create value for Detroit residents.
The proceeds are being used to finance the cost of certain capital projects of the City and paying costs of issuance associated with the Bonds. Bond proceeds will be used to preserve up to 6,000 homes before they are sold, through roof repair, secured windows and doors, and cleanouts. Proceeds will also be used to demolish 8,000 vacant houses, further reducing dangerous residential blight and raising property values for neighbors. The bonds were self-designated as Social Bonds.
Mayor Mike Duggan participated in a Live Webinar Investor Roadshow where he answered questions about the plan from investors. Overall, 63 institutional investors viewed the Investor Roadshow. The transaction was 20x oversubscribed Over 60 institutional investors placed orders.
After pricing adjustments, the transaction was oversubscribed by 10.1x in 2022, 3.9x to 14.3x from 2023 to 2042, 13.3x in 2046 and 13.7x in 2050 with an all-in TIC of 3.36%.