Two for Two: Detroit receives rating upgrades from S&P and Moody’s agencies in one week, with Moody’s returning City to “A” category status
- Moody’s elevates the City from Baa1 to A3 while S&P raises credit rating from BBB to BBB+
- First time City rating has been in “A” category since 1999
- Agencies cite Detroit’s “sustained strong financial performance and govenance conditions” and “strengthened financial resilience”
- Mayor Sheffield says dual upgrade shows fiscal discipline can co-exist alongside increased investment in residents and neighborhoods
Detroit, MI — The City of Detroit has secured credit rating upgrades from both S&P Global and Moody’s Ratings, with Moody’s returning the City’s rating to the “A” category, Mayor Mary Sheffield announced today. In a standout week, Moody’s on Thursday elevated the City’s Issuer and General Obligation Unlimited Tax (GOULT) ratings to A3 from Baa1. Earlier in the week S&P raised Detroit’s Unlimited Tax General Obligation (UTGO) bond rating to BBB+ from BBB, one step below the “A” category.
“This great news from Moody’s and S&P validates our strong financial management practices and budget investment priorities,” said Mayor Sheffield. “We have shown that structural fiscal discipline can coexist with a commitment to uplifting and investing in our residents and our neighborhoods. These two rating increases are also a result of 12 years of sound, responsible budgetary choices made by the city department heads and Detroit City Council, alongside the expertise of our Chief Financial Officers.”
The Moody’s and S&P increases represent Detroit’s 12th consecutive year with an upgrade and a return to both major agencies raising the city’s rating in the same year. In 2025, only Moody’s raised Detroit’s rating. During the city’s 2013 bankruptcy, Detroit’s credit rating had fallen to junk bond status, but the City has steadily rebuilt its financial standing through strong governance and consistent operating performance, and in 2024 returned to investment grade. The dual credit rating increase also came the same week a federal bankruptcy court judge closed its 13-year-old case with the city, ending the court’s oversight.
Moody’s report noted: “The upgrade to A3 reflects the city’s strengthened financial resilience on par with A3 peers, supported by consistently solid operating performance, strong reserves, low leverage, and good governance practices.”
In its report, S&P cited Detroit’s “sustained strong financial performance and governance conditions” and noted that the City has strengthened its ability to withstand economic uncertainty and potential downturns: “Detroit continues to bolster its financial resiliency and maintain solid operating performance, which will enable it to successfully weather the adverse effects of an economic slowdown, should one occur.”
The agency also highlighted Detroit’s strong reserves, institutionalized financial management practices, rising property values, stabilizing population, diversified economic activity, and improving governance structure as key factors supporting the upgrade.
Stable outlook and rising higher
Both agencies assigned a stable outlook for Detroit, S&P expressing its strong confidence in the Motor City’s long-term financial health and resiliency. “The stable outlook reflects our view that Detroit’s strong fiscal discipline and robust planning efforts, coupled with its strong budget position, capacity to cut costs, and substantial reserves will help sustain the city’s credit conditions in line with the ‘BBB+’ rating against a backdrop of an uncertain federal policy and geopolitical environment that could lead to weaker economic trends over the outlook period.”
Moody’s followed, “the outlook is stable because we expect Detroit will maintain stable financial performance and credit metrics consistent with the current rating level, supported by strong governance practices, including semiannual revenue estimating conferences and multi-year financial forecasting.”
Under Mayor Sheffield’s “Rise Higher” agenda, Detroit is building on 11 consecutive years of balanced budgets and surpluses while making strategic investments in neighborhoods, public safety, affordable housing, workforce development, youth programming, and small business growth. Some recent and ongoing initiatives include:
Investing in People and Neighborhoods
- Significant block-level neighborhood investment, including a $9.5M program to eliminate the entire 6300-location backlog of resident sidewalk replacement requests, as well as the Mayor’s Brighten Up the Block initiative with the Public Lighting Authority to add thousands more mid-block lights to Detroit neighborhoods.
- A City investment of $1.5M over three years in the RxKids program to leverage state and philanthropic investment that is providing cash prescriptions to the families of each new baby born in Detroit. Since it launched in February, the program has 2,600 families enrolled and has distributed nearly $5M.
- A commitment to pay all 9,000 city employees a livable wage of $21.45 per hour
Transformational Investments
- The University of Michigan Center for Innovation (UMCI), a major new research, education, and entrepreneurship hub under construction in downtown Detroit that will provide workforce training and non-degree programs
- Henry Ford Health’s $2.2 billion Destination: Grand development, which includes a new hospital tower, expanded medical facilities, mixed-income housing, and new public green space and is already transforming the New Center area
- AI and cybersecurity firm Eccalon establishing its headquarters at The Icon Building, reinforcing Detroit’s growing position as a technology and innovation hub and expected to create approximately 800 jobs
- Construction of two new 600-room convention center hotels to support the attraction of major conferences
Supporting Small Business
- The launch of the Detroit Small Business Technology Fund in partnership with the Detroit Economic Growth Corporation and Rocket Community Fund to help local businesses modernize and grow
- A $1.5M investment in Motor City Match, which to date has helped 205 small businesses open in neighborhoods across the city
- A $700,000 investment in the Detroit Start Up Fund to help support and attract innovators to Detroit
- $300,000 for the Detroit Legacy Business fund, which provides grants to businesses that have operated in the city for at least 30 years
- Creating the position of Director of Retail Attraction
A Growing City
- A citywide “Move Detroit” population growth strategy focused on attracting new residents, retaining current Detroiters, and welcoming former residents back to the city through housing assistance, entrepreneurship support, and relocation incentives. The US Census Bureau recently announced Detroit’s third consecutive year of substantial population growth.
- Significant progress in residential growth and property values, with the City adding more than 12,000 residents between 2021 and 2024 and residential property values increasing by approximately $500 million in the latest assessment cycle
“Reaching an A3 rating with Moody’s and a BBB+ rating with S&P stands as a testament to the rigorous structural infrastructure we have built across all city departments,” said CFO Tanya Stoudemire. “This milestone proves that Detroit is not just recovering but thriving and rising higher. By continuing our mission to maintain balanced budgets and robust cash reserves, we are ensuring long-term fiscal sustainability while simultaneously freeing up the resources so the Sheffield administration can make meaningful investments that directly improve the quality of life for all Detroiters,” said Stoudemire.
