DETROIT (AP) — A judge overseeing Detroit’s bankruptcy is
considering a recent agreement to pay off banks and settle millions of
dollars in debt tied to an interest rate swap deal.
A hearing
continues Friday that examines the proposal reached last month to
terminate the swaps deal for $165 million. The payoff had been $220
million, and Judge Steven Rhodes ordered the city to seek a better deal
with the banks.
Detroit pledged casino tax revenue in 2009 as
collateral to avoid defaulting on past pension debt payments. The swaps
allowed Detroit to get fixed interest rates on pension bonds with UBS
and Bank of America.
The city also has agreed to lower a financing loan to pay the banks.
Detroit’s two pension systems contend the new deal is still too costly.
Copyright 2014 The Associated Press. All rights
reserved. This material may not be published, broadcast, rewritten or
redistributed.
DETROIT (AP) — A judge overseeing Detroit’s bankruptcy is
considering a recent agreement to pay off banks and settle millions of
dollars in debt tied to an interest rate swap deal.
A hearing
continues Friday that examines the proposal reached last month to
terminate the swaps deal for $165 million. The payoff had been $220
million, and Judge Steven Rhodes ordered the city to seek a better deal
with the banks.
Detroit pledged casino tax revenue in 2009 as
collateral to avoid defaulting on past pension debt payments. The swaps
allowed Detroit to get fixed interest rates on pension bonds with UBS
and Bank of America.
The city also has agreed to lower a financing loan to pay the banks.
Detroit’s two pension systems contend the new deal is still too costly.
Copyright 2014 The Associated Press. All rights
reserved. This material may not be published, broadcast, rewritten or
redistributed.