Michigan’s Saginaw County postponed a $61 million bond sale planned for today, joining at least two other localities in the state in delaying offerings after Detroit filed a record municipal bankruptcy last month.
Larry Magnesen, a spokesman for Cincinnati-based Fifth Third Bancorp, lead underwriter on the offer, confirmed the postponement in a telephone interview. The general-obligation sale was set to be the biggest such deal in Michigan since Detroit sought court protection on July 18.
Saginaw joins Michigan’s Genesee County and Battle Creek in postponing general obligation offerings. Proceeds would help Saginaw, with about 198,000 residents, finance unfunded pension liabilities of about $60 million.
The county, about 100 miles (161 kilometers) north of Detroit, delayed its sale amid investor speculation that Emergency Manager Kevyn Orr’s treatment of general-obligation debt could set a precedent, especially within the state. He offered to repay holders of the debt about 20 cents on the dollar.
The county gauged investor interest before delaying the offer, according to three people familiar with the sale who requested anonymity because the pricing wasn’t final. A portion maturing in 2023 was offered at about 1.7 percentage points more than benchmark 10-year Treasuries, the people said.
The securities are rated Aa3 by Moody’s Investors Service, fourth-highest.
Robert Belleman, Saginaw’s controller, didn’t immediately return a voicemail and e-mail seeking comment.