Detroit bankruptcy

Detroit's two pension funds have reached a settlement with the bankrupt city that features dramatically lower cuts than originally proposed.

Detroit emergency manager Kevyn Orr defended the city's bankruptcy and talked about the deal with unlimited-tax general obligation bondholders and the importance of future capital markets access in a wide-ranging exclusive interview with The Bond Buyer.

With the help of mediators, Detroit reached a settlement with its police and fire retirees, one of the thorniest parts of the city's historic Chapter 9 bankruptcy.

Detroit bankruptcy Judge Steven Rhodes' decision to hire a municipal finance expert to review the city's bankruptcy plan attracted responses from five professionals, including a few well-known public finance figures.

Detroit's proposed settlement with its unlimited-tax general obligation bondholders is a positive development for the bondholders and insurers that wrap the debt, Moody's Investors Service said in a comment released Monday.

Detroit's historic bankruptcy case gained momentum with court approval of a controversial interest-rate swaps settlement and a deal on its unlimited-tax general obligation bonds, but challenges still lay ahead, legal experts said.

Market participants believe Detroit's settlement with three bond insurers Wednesday is a breakthrough in the city's bankruptcy proceedings, even though it is not final and leaves many questions unanswered.

A bond insurer Wednesday asked the bankruptcy judge overseeing Detroit's case to force the city to consider four new bids for the city's art collection that could bring in as much as $2 billion.

Detroit announced its first significant bankruptcy settlement, agreeing to pay insurers of its unlimited-tax general obligation bonds 74 cents on the dollar and to treat the debt as secured in the future.

Detroit's creditors filed a flood of objections to the city's bankruptcy plan Monday, arguing it lacked critical information needed to answer even basic questions such as recovery rates.

Bankruptcy Judge Steven Rhodes, who is overseeing Detroit's bankruptcy, will rule next week on a critical interest-rate swaps settlement after an all-day hearing Thursday that centered on the legality of the lien backing the derivatives.

Detroit's revised debt plan, which proposes even lower recoveries for bondholders, is a harsh reminder that even bonds with strong security pledges will suffer when economic conditions are too bad, Moody's Investors Service said in a comment titled "Detroit Turns the Screw."

Detroit can move forward with a controversial $120 million loan with Barclays, the federal judge overseeing the city's bankruptcy case said Wednesday.

Bondholder recoveries would tumble another 5% under an updated plan of debt adjustment that Detroit filed with the bankruptcy court Monday evening.

Bond insurer Syncora Guarantee requested dozens of documents from the Detroit Institute of Arts, Christie's, and the state tied to the insurer's challenge to the city's bankruptcy and its attempt to protect the city's art collection from sale.

The Detroit bankruptcy judge on Wednesday will consider a request from bond insurers and others requesting that a hearing on a controversial swaps settlement scheduled for Thursday be pushed back by at least 10 days.

Detroit Friday released details of a controversial $120 million loan with Barclays as ordered by the bankruptcy judge overseeing the case.

Detroit amended its interest-rate swaps deal to drop banks' requirement that it sign off on its plan of debt adjustment, and also said it would file an updated bankruptcy plan on Monday.

Detroit's proposed $120 million loan with Barclays, which would finance service improvements, advanced Tuesday after a key Michigan board approved the deal.

Standard & Poor's Tuesday downgraded Detroit's already junk-rated $5.9 billion of water and sewer bonds warning of a default even as the city turns to the private sector to take over the asset.