DETROIT — The Michigan Finance Authority sold $185 million in bonds on behalf of the Public Lighting Authority this week, through its Local Government Loan Program, to complete the funding necessary to relight the streets of Detroit.
The long-term, fixed rate financing refunded the $60 million interim financing sold in December 2013, and provides additional funds for the completion of the street lighting project. The issuance received strong investment grade ratings of “A-” from Standard and Poor’s and “BBB+” from Fitch.
“Lighting is an essential component to revitalizing Detroit,” said Gov. Rick Snyder. “Not only is it important to public safety, but it is a demonstration of the real improvements happening in the city every day.”
The interim financing has allowed for the construction of 9,000 new street lights. The remaining 55,000 will be funded from this issuance.
“As anticipated, investors did their homework and demonstrated an appreciation for the credit strength of our deal,” said Odis Jones, CEO of the Public Lighting Authority. “Every week we are adding 500 state of the art, LED lights throughout the city. As a result the new system will be far more reliable and energy efficient than what was here before. We are investing in the latest technology to ensure the system is built to last for our citizens.”
About 35 separate institutions and several dozen individual retail accounts placed orders for the bonds, resulting in an all-in interest cost of 4.53% for the 30-year transaction.