We urge the state to do all it can to protect the interests of other stressed municipalities and, ultimately, of its proud residents.
Sources: BlackRock, Bloomberg, Michigan Department of Treasury, City of Detroit.
Peter Hayes, Managing Director, is head of BlackRock’s Municipal Bonds Group and a regular contributor to The Blog. You can find more of his posts here.
The opinions expressed are those of Peter Hayes as of May 15, 2014 and are subject to change at any time due to changes in market or economic conditions. The comments should not be construed as a recommendation of any individual holdings or market sectors. BlackRock owns Detroit LTGO debt, and has been an active participant in Detroit’s Chapter 9 process on behalf of the LTGO bonds.
Bonds and bond funds will decrease in value as interest rates rise and are subject to credit risk, which refers to the possibility that the debt issuers may not be able to make principal and interest payments or may have their debt downgraded by ratings agencies. A portion of a municipal bond fund’s income may be subject to federal or state income taxes or the alternative minimum tax. Capital gains, if any, are subject to capital gains tax.