Michigan

Detroit's attorneys launched opening statements on the first day of a historic trial on the city's bankruptcy exit plan, arguing that the city may not survive without the debt adjustment plan and defending a deal to raise money backed by the art collection.

Barring any last-minute settlements with bond insurers, Detroit will begin defending its plan to restructure debt and begin to rebuild the battered city.

The Michigan Finance Authority said it received orders from 30 firms on its $108 million state aid revenue note sale on behalf of Detroit Public Schools that saw a sharp drop from last year in interest rate penalties imposed on the struggling district.

The judge overseeing Detroit's bankruptcy chastised bond insurer Syncora Guarantee Inc. for attacking federal mediators as biased and ordered the insurer to defend why it shouldn't face sanctions.

Detroit has finalized an agreement with Barclays Capital Inc. for up to $275 million in financing to exit Chapter 9 bankruptcy as the city gears up for a trial next week on its confirmation plan.

Detroit said it stands behind the proposed $815 million 'grand bargain" as the best solution to aid pensioners and protect the city art museum's collection, rejecting an offer from Art Capital Group for a $4 billion loan with the art collection serving as collateral.

Detroit’s $1.8 billion water and sewer revenue bond sale this week drew about $7.6 billion of orders, officials said, allowing the city to lower interest rates and carve out some additional savings.

The judge in charge of mediation in the Detroit bankruptcy case ordered a new round of talks between the city and holders and insurers of $1.4 billion of pension certificates of participation.

Standard & Poor's raised Detroit's water and sewer revenue bonds three levels up from junk bond territory ahead of the city's $1.8 billion sale of mostly refunding bonds, offering a more positive assessment than Fitch Ratings or Moody's Investors Service.

Detroit plans to sell $1.8 billion of water and sewer bonds Tuesday through the Michigan Finance Authority in a transaction that allows it to finance the purchase of $1.5 billion of tendered bonds and further its efforts to exit bankruptcy.

Detroit's voluntary tender program of its water and sewer revenue bonds may have provide an "optimal solution" for the market but it still represents a default, Municipal Market Advisors said Monday.

Detroit will refinance a chunk of its water and sewer debt as part of a tender offer settlement with bondholders.

Michigan deputy treasurer Wayne Workman, who joined the state last year after a long stint as its financial advisor at Robert W. Baird & Co., has been appointed interim director of the state housing authority.

Fitch Ratings said Detroit's offer to holders of $5.2 billion of water and sewer bonds to tender their debt as part of a bankruptcy settlement does not constitute a distressed debt exchange, an analysis that could bode well for ratings the planned refinancing of the debt.

A web site that allows interested parties to watch Detroit water and sewer muni bond tenders in near-real time is being used for the first time in the municipal bond market.

Detroit has asked the federal judge in charge of its Chapter 9 to consider forcing bond insurer Syncora Guarantee to issue an apology for suggesting that federal mediators have tainted the bankruptcy process.

Detroit Public Schools will move forward with a plan to issue $111 million of state aid notes as well as an updated deficit elimination plan that calls for 10% pay cuts and the closure of up to 24 schools.

Bond insurer Syncora Guarantee challenged Detroit's settlement with its unlimited-tax general obligation bondholders in court Tuesday, arguing that it means Detroiters will continue to pay taxes on a levy that they did not approve on the original ballot.

As Detroit gears up for a key trial on its bankruptcy exit plan next week, a long-simmering dispute over $1.4 billion of certificates of participation is just starting to heat up.

The Detroit City Council has approved a series of four bond issues that include nearly $1 billion of new limited-tax GO bonds to help finance unsecured creditor settlements as part of its bankruptcy plan.