WASHINGTON — While Detroit's bankruptcy filing on Thursday was not unexpected, market participants say it's the largest of its kind and unique in other ways as well, making its impact hard to gauge. But so far, the implications for the muni market appear potentially ominous.

"This is the first time the largest city in a state has filed for Chapter 9 bankruptcy," said Ira Hammerman, senior managing director and general counsel at the Securities Industry and Financial Markets Association. "We are concerned that this development could raise borrowing costs for Detroit and other municipalities in Michigan over a long period because investors could perceive Michigan local government bonds as considerably less secure going forward."

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