Detroit is broke. We are paying the penalty-----Detroit paying penalty on first bond sale since bankruptcy

Detroit paying penalty on first bond sale since bankruptcy - Crain's Detroit Business:
"Detroit is paying a high price in its return to the $3.6 trillion municipal bond market for the first time since emerging from a record bankruptcy.
The $245 million of bonds, to be sold Wednesday through the Michigan Finance Authority, have the top claim on city income taxes to ensure investors are repaid.
Even so, 14-year debt is being offered at an initial yield of 4.75 percent, said three people familiar with the sale who requested anonymity because it isn’t final.
That’s 2.1 percentage points more than top-rated securities.
“It’s still Detroit,” said Dennis Derby, a portfolio manager in Menomonee Falls, Wis., for Wells Capital Management, which holds the city’s water bonds among its $39 billion of munis.
“There’s still concerns of whether or not they can have positive momentum.”
Detroit filed for bankruptcy protection two years ago to escape from debts it couldn’t afford after the population tumbled, tax collections slid and the automobile industry’s decline left the economy reeling.
That allowed the city to cut $7 billion from its obligations by the time it emerged from bankruptcy in December, an effort to steady the government’s finances and hasten its revival."