Detroit goes from bankrupt to “investment grade” credit rating in less than 10 years

Moody’s Investors Services on Friday gave the city of Detroit a rating increase. The city went from bankruptcy in 2014 to investment grade in 2024.

The new rating returns Detroit to investment-grade status for the first time since 2009. We are now higher than in several cities such as Chicago.

In a report issued Friday, March 22, 2024, Moody’s praised Detroit’s strong financial performance over the last decade as a key reason for the growing confidence.

“It has been 10 years of hard choices and sound financial management by these great leaders,” Mayor Mike Duggan said. “No one in 2014 would have predicted Detroit returning to investment grade in less than a decade. In 2014, all the analysts were predicting a financial crisis in 2023.”

The rating maintains the City’s positive outlook, citing resilience, solid financial performance and improving tax base as reasons to expect a continued upward trajectory.

It was expected that resident employment would decline 0.4% annually, resulting in 8,000 jobs lost from 2014 to 2024. Instead, annual resident job growth has averaged 1.1% and Detroiters have gained 24,000 jobs.

The improved bond rating is indicative of the City’s improving economy and tax base, according to the Moody’s report: “Detroit’s economy has markedly improved in recent years and will continue to recover given preliminary tax base growth, improved services, reduced blight and a pipeline of development projects, including major investments in new downtown hotels, retail, condos and apartments.”