Moody's Investors Service said it has placed the Detroit's certificates of participation Ca rating on review for possible downgrade.
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This action follows the recent settlement announcement between the city and Syncora, which insures a portion of the city's outstanding COPs.
The settlement includes a cash payment, as well as extended and optional stakes in city owned assets. It is likely that the recovery for creditors will be below 35% and as a result consistent with a C rating. The review will be resolved if and when a settlement with FGIC, the other main insurer of the city's COPs liabilities, is made public.
