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“Michigan’s Finance Authority is offering an interest rate almost 14 times higher than that on top-rated bonds to sell $92 million of one-year notes for Detroit’s public schools.  Today’s deal is the first tied to the Motor City since it sought bankruptcy protection July 18. The bonds are backed by state aid payments. The securities maturing in August 2014 are being offered with a preliminary yield of 4.375 percent, down from 4.5 percent earlier in the sale, according to three people familiar with the deal who requested anonymity because the pricing wasn’t final. That compares with a 0.32 percent interest rate on benchmark AAA munis due in one year.”

http://www.bloomberg.com/news/2013-08-20/michigan-offering-4-5-yield-on-school-notes-shows-detroit-stain.html