Detroit's credit rating upgrade may bring more jobs and opportunities to the city, residents

DETROIT (FOX 2) - Detroit's credit rating has been upgraded by Moody's Investors Service, meaning, the city will be able to borrow more money, at and a lower rate, being able to do more for the city. 

In the Moody's scale rating, the City of Detroit has been upgraded from a Ba3 to a Ba2, similar to a credit score rating., with Ba1 being the highest. Moody choose to upgrade the rating, with a "positive" outlook, in a report issued Wednesday, which will strengthen the city’s financial position. 

A good credit score can make borrowing easier and more affordable. 

Detroit last saw an upgrade from Moody’s in May 2018, though this is the first time in 13 years that the City has received a Ba2 rating. Higher ratings mean lower costs for governments when borrowing funds to pay for city necessities and improvements.

"Detroit's revenue base was exposed to the pandemic driven economic disruptions. Income taxes dropped because of nonresidents working remotely, and wagering taxes were halted as casinos closed," the Moody’s report said. 

The report also highlights the City’s diversifying economic base and strengthening job growth. Detroit is planning to further expand its employment base with GM and Ford, as well as other auto suppliers, making investments in the city that would create jobs. 

Detroit is also prepping to become a logistics hub, a position that will be strengthened by a second international crossing being built, the Gordie Howe International Bridge. Additionally, Huntington Bank, which recently absorbed TCF and Chemical Banks, is making Detroit its commercial banking headquarters and constructing a new 20-story building.

"Moody’s upgrade is an acknowledgment of the hard work done to restore the City from bankruptcy," said Jay Rising, Chief Financial Officer for the City of Detroit. "We know we have more work ahead of us, and we are confident we will overcome the challenges to the City’s credit posed by risks with future pension funding."

The full report can be found at Moody's Investors Services credit opinion on Detroit