Detroit to file new swaps settlement proposal
DETROIT (AP) — The city of Detroit is hoping the third time's the charm in settling a pension debt deal with UBS and Bank of America Merrill Lynch.
The Detroit Free Press reports that an attorney representing the city in its bankruptcy told federal Judge Steven Rhodes Wednesday that Detroit plans to file details of the proposed swaps settlement within three to four days.
Rhodes nixed the first settlement that would have paid the banks $230 million. A $165 million proposal also was shot down last month. Detroit had lined up a loan to pay for the settlements.
In 2009, Detroit pledged casino taxes as collateral to avoid defaulting on pension debt payments. The city locked itself into high interest rates on bonds. The deal became too costly when interest rates plunged.