CHICAGO - Bank of America Merrill Lynch has agreed to push back the due date on $80 million that Detroit owes the bank in order to give state and city officials time to work out a dispute that has threatened to tie up badly needed state aid for the city.

The agreement gives Detroit and the Michigan Finance Authority until August 15 to complete a planned $137 million refinancing to repay notes the authority privately placed with the bank to raise cash for the city. The original mandatory redemption date on the notes was July 27.

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