Press Release|Public Finance
KBRA Affirms A Rating with Stable Outlook on the City of Detroit Downtown Development Authority Tax Increment Revenue Refunding Bonds, Series 2024 (Catalyst Development Project)
5 Jun 2025 | New York
KBRA affirms the long-term rating of A with a Stable Outlook on the City of Detroit Downtown Development Authority Tax Increment Revenue Refunding Bonds, Series 2024 (Catalyst Development Project).
Key Credit Considerations
Credit Positives
- Pledged Revenues provide sound coverage of maximum annual debt service.
- Established growth trend in Pledged Revenues and expected future investment within the District supporting growth in taxable property valuation and incremental value.
- The District’s Bond Indenture is closed to the issuance of additional parity bonds except for refunding transactions for savings.
Credit Challenges
- The Detroit economy remains fragile and susceptible to disruptive conditions that could result in decreased taxable value, reduced TIF revenues, and decreased coverage levels.
- Potential that enduring hybrid work results in stagnant demand for commercial space, ultimately leading to a reduction in assessed values.
Rating Sensitivities
For Upgrade
- Significant development and diversification in the District resulting in increased Pledged Revenues and higher debt service coverage.
For Downgrade
- Declining property values, reduced investments, or other economic factors that significantly weaken available Pledged Revenues and debt service coverage.
- Any actions by the City, State, County, or other taxing entities to reduce tax rates, reduce taxable property value, or in any other way weaken the Pledged Revenues.
- Any change to the City’s or Wayne County’s tax practices that erodes DDA’s current insulation from historically weak county-wide property tax collections.
To access ratings and relevant documents, click here.