State Sells Bonds to “Fix the Darn Roads”

The Michigan Department of Transportation has announced closing on the sale of an $800 million bond issue. The sale is the first step toward a road rebuilding project throughout the state.

The bonds are expected to cover the cost of the repair of the freeways with the highest use, starting with a $60 million I-496 rebuild.

The total $3.5 billion bond sale is planned to finance 122 major highway projects, including the rebuilding of I-69 in St. Clair County, which is already in progress.

The bond sale was endorsed by Moody’s Investor Services, even in the midst of a pandemic. A statement from Moody’s said, “Michigan’s state trunkline bonds are not susceptible to immediate material credit risks related to coronavirus because of strong coverage of debt service and limits on additional leverage. The longer-term impact will depend on both the severity and duration of the crisis.”  

The state’s all-in true interest costs are 2.727%. The $800 million sale is expected to generate $1.017 billion in proceeds.

Reporting for WGRT – Jennie McClelland