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.

The city about 120 miles (193 kilometers) west of Detroit plans to sell the debt on Aug. 14, Moody’s Investors Service said in a report today. Linda Morrison, the city’s finance director, didn’t immediately return a telephone call seeking comment.

After Detroit filed on July 18, Genesee County delayed a $54.2 million offering last week, a sign that issuers in the state were being penalized.

Battle Creek’s bonds have an Aa3 rating from Moody’s, the fourth-highest level. The company revised the Cereal City’s outlook to negative, based on the expectation that “the local economy will continue to be relatively challenged” amid declining property values and elevated unemployment.

Moody’s also cited stable reserve levels as a strength for the municipality of 52,000, where Kellogg Co. has its headquarters.

Investors in the $3.7 trillion municipal market have speculated Detroit’s treatment of its general-obligation debt could set a precedent in Michigan and nationwide. The June plan from Detroit Emergency Manager Kevyn Orr to avoid bankruptcy proposed imposing losses on holders of some Detroit general obligations.

Investors have demanded higher interest rates to own Michigan debt in the past month.

The extra yield buyers require to own 10-year general-obligation securities sold by Michigan rather than top-rated debt rose to 0.44 percentage point on Aug. 2, the most since July 12, data compiled by Bloomberg show.

Battle Creek general obligations maturing in September 2021 yielded about 3.11 percent on average in trading July 31, or about 0.64 percentage point more than benchmark debt, data compiled by Bloomberg show. That’s the slimmest gap since March.