Detroit, whose population has dropped by half since 1950, borrowed $100 million to turn the MGM Grand Casino’s former site into a headquarters for the police, fire and emergency-services departments.
The city sold so-called Recovery Zone Bonds authorized under the U.S. economic-stimulus plan, borrowing at 4.55 percent, the city said in a press release today. The bonds, with the longest term maturing in 2035, were sold through the Michigan Finance Authority by investment banks led by Siebert Brandford Shank & Co., according to data compiled by Bloomberg.
“The financial markets believe in what we’re doing to bring fiscal responsibility back to Detroit,” said Mayor Dave Bing, in a prepared statement today.
So-called recovery zone bonds were included in the economic-stimulus package signed by President Barack Obama last year to help expand the economy of areas with poverty and unemployment. They’re a type of Build America Bond that comes with a 45 percent interest subsidy rather than 35 percent rate under the Build America program, which expires Dec. 31.
The bonds were rated A1, or fifth highest, by Moody’s Investor’s Service and AA-, or fourth highest, by Standard & Poor’s.
Detroit’s population has declined by 50 percent to 910,000 since 1950, according to U.S. Census figures cited in the official statement for the bonds.