Midwest

Chicago city council members, who have long scrutinized minority and women-owned business participation in city bond deals, are turning their attention to the racial makeup of non-minority-owned firms awarded debt sales.

Detroit, going to battle with its interest-rate swap counterparties, filed a lawsuit seeking to invalidate $1.4 billion of pension certificates that the swaps hedge, saying the borrowing was illegal from the start.

Detroit's bankruptcy plan circulated to creditors last week yields them greater recoveries to creditors than a first offer floated last year, but should still be seen as a rough draft that could change significantly.

Detroit has asked the bankruptcy court overseeing its Chapter 9 case to dissolve a committee representing unsecured creditors that the U.S. Trustee said is required under code.

Detroit late Friday filed a lawsuit challenging the legality of the structure tied to its 2005 sale of pension certificates and controversial swaps linked to the debt.

Negotiations intensified on several fronts as Detroit nears a self-imposed deadline to craft a detailed plan to exit Chapter 9 bankruptcy, with the fate of a debtor-in-possession loan in doubt.

The University of Illinois heads to market with a $180 million new money sale that offers investors high grade state-related paper from a credit that has mostly weathered the state's own ratings deterioration.

Illinois House Speaker Michael Madigan introduced legislation to cut the state's business tax in half as state lawmakers shift their focus in the new legislative session from pension reform to taxes.

Detroit has reportedly proposed paying its pensioners more — and in cash — than its general obligation bondholders, who would receive notes equivalent to roughly 20% percent of their claims in its bankruptcy exit plan.

Standard & Poor's and Moody's both revised their outlooks to negative on the University of Chicago noting poorer than expected fiscal performance, planned deficits, and future borrowing plans.