Michigan’s Outlook Revised to Positive From Stable by Moody’s
The outlook on Michigan’s general- obligation debt was changed to positive from stable by Moody’s Investors Service.
Moody’s assigned the state’s Aa2 rating, third highest, to the planned sale of $200 million in bonds.
The revision “reflects Michigan’s progress in rebuilding financial reserves and running structurally balanced budgets, which signals an improving credit trajectory,” according to a report today. After the auto industry’s crisis in 2009, “Michigan is rebuilding its balance sheet.”
General Motors Co. (GM), Ford Motor Co. (F) and Chrysler Group LLC have had rising revenue and profits since their bankruptcies and restructurings, earning a combined $13.5 billion last year. Auto jobs in Michigan have increased 34 percent since their January 2009 low, according to the Center for Automotive Research in Ann Arbor.
Michigan’s unemployment rate in January was 8.9 percent, compared with a national 7.9 percent, according to federal statistics.
The extra yield demanded by investors in the $3.7 trillion municipal market to own debt from Michigan and its municipalities, relative to top-rated bonds, narrowed to 0.58 percentage point on March 13, matching the lowest since April 2009, according to data compiled by Bloomberg. The spread has since widened to 0.63 percentage point.
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