Saginaw County joining at least two other Michigan issuers in putting off municipal bond sales shows the fallout from Detroit’s bankruptcy is greater than expected by Governor Rick Snyder and Emergency Manager Kevyn Orr.
Kellogg Co. has agreed to buy palm oil only from suppliers who can prove they don’t damage rain forests, the strongest move yet by a public food manufacturer to stop the practice, according an environmental group that pressured the maker of Corn Flakes and Rice Krispies.
Battle Creek, Michigan, home of the world’s largest cereal-maker, plans to sell $16 million in general-obligation bonds after at least one issuer in the state delayed an offer following Detroit’s record bankruptcy filing.
Detroit’s proposal to restructure its $18 billion of debt by paying pensioners at more than twice the rate of some municipal bondholders threatens to increase borrowing costs for localities throughout Michigan.
Detroit’s plan to reduce its $18 billion of liabilities may derail the biggest wave of Michigan debt issuance since 2009 and elevate borrowing costs as investors renew focus on the state’s approach to bondholders.