KBRA Rates City of Detroit Downtown Development Authority Tax Increment Revenue Refunding Bonds

KBRA has assigned a long-term rating of A with a Stable Outlook to the City of Detroit Downtown Development Authority Tax Increment Revenue Refunding Bonds, Series 2024 (Catalyst Development Project). Concurrently, KBRA has placed the outstanding long-term rating assigned to the Tax Increment Revenue Refunding Bonds, Series 2018A (Catalyst Development Project) on Watch-Developing, pending the outcome of planned financing.

Key Credit Considerations

The rating reflects the following key credit considerations:

Credit Positives:

  • FY 2023 Pledged Revenues provide pro forma 4.25x MADS coverage.
  • Restriction on additional parity bonds, except for refunding bonds aimed at achieving savings.
  • Established growth trend in Pledged Revenues.
  • Plans for substantial private investment within District boundaries, bolstering taxable property valuation despite not directly increasing Pledged Revenues.

Credit Challenges:

  • Fragility of Detroit’s economy despite ongoing post-pandemic recovery.
  • Potential weakening of debt service coverage ratios in the event of significant economic downturn before stabilization of taxable property values.
  • Risk of assessment reductions due to reduced demand for office space from hybrid work arrangements.

Rating Sensitivities:

For Upgrade:

  • Significant development and diversification in the District leading to increased Pledged Revenue and higher debt service coverage.

For Downgrade:

  • Decline in property values or reduced investments adversely affecting Pledged Revenues beyond current stress scenarios.
  • Changes in tax practices by City, State, County, or other entities weakening Pledged Revenues.
  • Actions impacting DDA’s insulation from historically weak county-wide property tax collections.

For access to ratings and related documents, click here.


  • Public Finance: General Property Tax/Assessment Revenue Methodology
  • ESG Global Rating Methodology


  • Information Disclosure Forms detail sources and methodologies used in credit rating determination.
  • Rating category explanations available here.
  • Further disclosures on this rating action provided in referenced Information Disclosure Forms.

For more information on KBRA policies, methodologies, rating scales, and disclosures, visit www.kbra.com.

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