Detroit bankruptcy

Bond insurer Financial Guaranty Insurance Co. asked the federal court to delay the Detroit bankruptcy trial for at least a week to give it time to prepare new legal strategy in light of the city's proposed settlement with Syncora Guarantee Inc.

Syncora Guarantee Inc. is pushing back against widely reported claims that it is receiving 26 cents on the dollar in its tentative settlement with Detroit, saying the actual recovery is “much lower than reported.”

Detroit's chief bankruptcy mediator ordered FGIC, the last holdout creditor, into talks with the city and Syncora Guarantee Inc. and other major creditors on Friday to try to resolve a dispute over $1.5 billion of certificates of participation.

Detroit and Syncora Guarantee Inc. will spend the next few days working to finalize a major agreement that would speed up the bankruptcy, but important questions remain in the case, muni market experts said.

Detroit's historic bankruptcy case saw a major breakthrough late Tuesday when the city and its strongest opponent, bond insurer Syncora Guarantee, announced they had reached an agreement in principal.

Detroit Mayor Mike Duggan said emergency manager Keyvn Orr will likely serve as a consultant to the city's bankruptcy after his tenure as emergency manager expires at the end of the month.

Detroit has reached a deal to spin its troubled Water and Sewerage Department to a new regional authority, that allows up to $800 million of new money bonds for capital improvements to assets located in the city limits.

Pension obligations are no different than borrowing obligations, public finance expert Richard Ravitch told a group of investors in New York.

Detroit entered the second week of the confirmation trial for its bankruptcy exit plan Monday, calling witnesses who testified to the city's desperate need for the $1.5 billion of capital investments featured in the plan.

Detroit's first witness in its bankruptcy trial, CFO John Hill, testified that the city's confirmation plan would mean more money for the struggling city but that meeting some of the revenue targets could be difficult.

The three counties around Detroit objected to the city's bankruptcy exit plan, arguing that the proposed treatment of the massive Detroit Water and Sewerage Department would spell catastrophe for the aging system.

Under questioning from the federal judge overseeing Detroit's bankruptcy, bond insurer Syncora Guarantee Inc. said it would settle a year-long battle with the city for 75 cents on the dollar.

Detroit's attorneys launched opening statements on the first day of a historic trial on the city's bankruptcy exit plan, arguing that the city may not survive without the debt adjustment plan and defending a deal to raise money backed by the art collection.

Barring any last-minute settlements with bond insurers, Detroit will begin defending its plan to restructure debt and begin to rebuild the battered city.

The judge overseeing Detroit's bankruptcy chastised bond insurer Syncora Guarantee Inc. for attacking federal mediators as biased and ordered the insurer to defend why it shouldn't face sanctions.

Detroit has finalized an agreement with Barclays Capital Inc. for up to $275 million in financing to exit Chapter 9 bankruptcy as the city gears up for a trial next week on its confirmation plan.

Detroit said it stands behind the proposed $815 million 'grand bargain" as the best solution to aid pensioners and protect the city art museum's collection, rejecting an offer from Art Capital Group for a $4 billion loan with the art collection serving as collateral.

Detroit’s $1.8 billion water and sewer revenue bond sale this week drew about $7.6 billion of orders, officials said, allowing the city to lower interest rates and carve out some additional savings.

The judge in charge of mediation in the Detroit bankruptcy case ordered a new round of talks between the city and holders and insurers of $1.4 billion of pension certificates of participation.

Standard & Poor's raised Detroit's water and sewer revenue bonds three levels up from junk bond territory ahead of the city's $1.8 billion sale of mostly refunding bonds, offering a more positive assessment than Fitch Ratings or Moody's Investors Service.