Michigan's Saginaw County on Thursday postponed a $60.55 million pension obligation bond sale, the latest sign of how Detroit's bankruptcy filing is affecting access to the municipal bond market by other localities in the state.
"The deal has been postponed and no further information about the postponement is available at this time," said Larry Magnesen, director of corporate communications for Fifth Third Bancorp, the lead manager for the deal.
Officials of Saginaw County, which has a population of about 200,000 and is about 100 miles north of Detroit, were not immediately available to comment.
Saginaw County was the third locality in Michigan to postpone a bond sale since Detroit filed for Chapter 9 bankruptcy protection on July 18.
"This trend is something we are watching," said Robert Amodeo, portfolio manager at Western Asset. "It is worrisome. We have to wait and see if this will also happen to larger issuers when they come to the market"
"For small issuers, the trend is likely to continue because people do not have the interest or the ability to conduct a credit analysis," Amodeo said.