Judge to decide on Detroit's deal to pay off debt

Print
Email
|

Associated Press

Posted on January 15, 2014 at 4:00 PM

Updated Wednesday, Jan 15 at 4:04 PM

DETROIT (AP) — The bankruptcy judge overseeing Detroit's restructuring plans to render his decision Thursday afternoon on a renegotiated interest rate swaps deal that could save the city millions of dollars.

A spokesman says Judge Steven Rhodes will rule from the bench on the $165 million deal reached last month with UBS and Bank of America Merrill Lynch.

The complicated deal before Rhodes involves the city's pledge to use casino tax revenue as collateral to avoid defaulting on pension debt. The swaps let Detroit get fixed interest rates on pension bonds.

An initial $220 million payoff was reached, but Rhodes says Detroit could do better.

State-appointed Detroit emergency manager Kevyn Orr says the deal is critical. He filed for bankruptcy protection in the face of a long-term municipal debt of about $18 billion.

Print
Email
|