CHICAGO – The resolution of Detroit’s proposed treatment of its pension, retiree healthcare, and bond obligations in its historic Chapter 9 bankruptcy stands to shape the municipal market for years, the Federal Reserve Bank of Chicago concludes in a new report.

Detroit emergency manager Kevyn Orr has proposed treating the city’s general obligation bonds as unsecured debt unless it carries a double-barreled revenue pledge. Such treatment puts it on par with pensions and retiree health care costs.

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