Detroit received orders from 30 institutional investors for its $80 million high-yield general obligation sale last week, the city's chief financial officer said.

The buyers, he said, include repeat purchasers from its 2018 GO deal, the city's first under its own credit since emerging from bankruptcy in 2014.

The city’s ratings have improved since the late 2018 sale but still sit three notches below investment grade.

Spreads on last week's deal widened to levels that traders said were in line with the market despite the rating improvement. Overall, borrowing rates were lower than the prior deal because the market’s current rate environment is lower.

Detroit received $780 million of orders based on the early pricing scale and was able to trim yields in the repricing with the true interest rate landing at 4.64%.

“Today’s bond sale shows the continued confidence investors have in the city’s future,” said David Massaron, the city CFO.

In last week's pricing, the 10-year maturity with a 5% coupon settled at a 3.75% rate, a spread of 280 basis points to the Municipal Market Data’s AAA benchmark.

The 20-year with a 5.50% coupon settled at 4.03%, a 252 bp spread, and the 30-year with a 5.50% coupon settled at 4.12 %, a 239 bp spread. The city shaved five bps off the 10-year, eight off the 20-year, and 16 off the 30-year in repricing.

The city’s $135 million 2018 sale was its first since the bankruptcy that was not supported by any direct state intercepts.

The 10-year maturity in the 2018 sale landed at 4.45% yield, a 202 bp spread to the AAA and the final 20-year landed at 4.95% yield, a 198 bp spread. Both offered 5% coupons.

Proceeds will finance work on more than 25 parks, the first phase of the Joe Louis Greenway, fire house and police precinct and recreation center repairs, improvements to the Charles H. Wright Museum of African American History and the Detroit Historical Museum, and construction of an expanded animal control facility.

Balanced budgets and built reserves have lifted Detroit's ratings to higher speculative-grade levels, but the COVID-19 pandemic’s fiscal wounds threaten near-term progress.

Ahead of the new sale, Moody’s Investors Service affirmed its Ba3 rating and positive outlook while S&P Global Ratings affirmed its BB-minus rating and the negative outlook it assigned in April as the pandemic unfolded.

The negative outlook "reflects the unprecedented fiscal and economic pressure stemming from the COVID-19 pandemic and ensuing recession," said S&P analyst John Sauter.

JPMorgan and Siebert Williams Shank & Co. LLC were senior managers and JPMorgan ran the books. Public Resources Advisory Group advised the city and Miller Canfield was bond counsel.

If voters on Nov. 3 approve a $250 million bond question to fund blight removal, the city would return with a roughly $175 million UTGO issue in late 2020 or early 2021. No tax increases would be required as projections show continued capacity for capital investment without raising the debt millage.