Detroit bankruptcy judge reviews new deals to pay off debt - New York News

Detroit bankruptcy judge reviews new deals to pay off debt

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DETROIT (AP) -- A judge overseeing Detroit's bankruptcy is considering a recent agreement to pay off banks and settle millions of dollars in debt tied to an interest rate swap deal.
 
A hearing continues Friday that examines the proposal reached last month to terminate the swaps deal for $165 million. The payoff had been $220 million, and Judge Steven Rhodes ordered the city to seek a better deal with the banks.
 
Detroit pledged casino tax revenue in 2009 as collateral to avoid defaulting on past pension debt payments. The swaps allowed Detroit to get fixed interest rates on pension bonds with UBS and Bank of America.

The city also has agreed to lower a financing loan to pay the banks.
 
Detroit's two pension systems contend the new deal is still too costly.

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