Detroit water department will make its last bond deal ever

Nov 30, 2015

Credit Paul Hitzelberger / UPW

Detroit’s water and sewerage department is about to do its last financing deal ever.

As of January 1, the DWSD will transfer operations of its treatment plants and infrastructure outside to the new, regional Great Lakes Water Authority, which emerged from Detroit's bankruptcy process.

At least, that’s the plan.

A majority of the current water and sewer bondholders still need to sign off on it.

The Authority will test the bond market waters a little early this week, as DWSD makes a final offer to refinance more than $280 million worth of bonds. Those bonds were recently upgraded by two major ratings’ firms.

The bonds will be sold with the understanding that all the department’s debt will shift over to the GLWA.

The deal is seen as favorable to bondholders because the GLWA “insulates” them from the city of Detroit’s finances going forward. They’re also secured with system revenues.