Michigan

Bondholders of the nearly $6 billion of Detroit water and sewer debt hold one of the strongest hands for recovery as Detroit emergency manager Kevyn Orr tries to restructure the city's massive debt load.

In the first formal push against Detroit emergency manager Kevyn Orr's restructuring plan, Ambac Assurance Corp. Monday called the plan harmful to the city's future and said it has hired an advisory firm.

Detroit sued Syncora Guarantee Inc. in state court Friday, accusing the bond insurer of blocking access to casino revenue and interfering with delicate negotiations over interest-rate swaps hedging pension certificates.

Once considered relatively isolated from Detroit's problems, its $6 billion of water and sewer debt have been been pushed into junk territory by two of the three major ratings agencies.

Michigan Gov. Rick Snyder Tuesday signed into law a pair of bills broadening state power over small school districts and appointed a review team to investigate the Pontiac School District.

Breaking a weeks-long silence, a spokesman for Michigan Gov. Rick Snyder told The Bond Buyer that the state supports Detroit's plan to default and treat its GO debt as unsecured. It answers a question that's been on the mind of the muni market since Kevyn Orr unveiled his controversial plan in June.

Michigan Gov. Rick Snyder appointed a former human resources director at the city of Pontiac to serve as emergency manager of Hamtramck, which now enters its second state takeover in less than 10 years.

After a massive restructuring of Pontiac, Mich., emergency manager Louis "Bud" Schimmel says he's ready to retire after tackling one last obstacle: the city's retiree health care debt.

Detroit's restructuring plan illustrates how unfunded pension and health care liabilities threaten bond insurers, Moody's Investors Service said in a comment Monday.

Detroit emergency manager Kevyn Orr ordered an inspection of all the city employee benefit programs for possible corruption or mismanagement.

Detroit announced Wednesday plans to build a $650 million hockey and entertainment complex downtown that would rely on $300 million of private activity bonds for financing.

Detroit's controversial debt restructuring proposal illustrates the need for clarity in a shifting municipal market, the director of municipal research at Breckinridge Capital Advisors said Wednesday.

Detroit emergency manager Kevyn Orr knows the muni market is rattled that the city would cut GO debt in a restructuring, but says investors had plenty of warning signs.

The Michigan Court of Appeals Friday blocked an Ingham County judge's order that an aide to Gov. Rick Snyder turn over the names of all candidates for the Detroit emergency manager position.

Fitch Ratings downgraded to D from C the rating on $1.5 billion of pension obligation certificates of participation issued by Detroit in 2005 and 2006. The downgrade comes after Detroit missed a $39.7 million pay due on the COPs last Friday.

Michigan attorney general Bill Schuette issued a formal opinion arguing that the Detroit Institute of Art's prized art collection is off limits to creditors or Detroit officials struggling to cover the city's debt because it is held in a charitable trust.

Detroit's plan to treat all $11.4 billion of unsecured debt the same is aggressive and would set a precedent in the market, analysts said.

Detroit's decision to default on its unsecured debt could be an opportunity for the city's bond insurers to prove their importance in the market.

Detroit’s announcement Friday that it will default on some of its bonds, including a $39.7 million pension certificate payment due Friday, could have major repercussions for the municipal market, analysts and bond attorneys said.

A day after Standard & Poor's downgraded Detroit four notches, with the city's emergency manager set to meet with creditors, Moody's lowered its rating on all the city's outstanding bonds, pushing water and sewer debt to speculative grade.