Bond Insurers Drop Objections to Detroit's Bankruptcy
Some objectors remain steadfast
Detroit's path through bankruptcy began to take shape on Tuesday, with a second bond insurance firm ready to drop its objections to a controversial city financing plan, joining another bond insurer, bondholders and a committee of retired city workers in reaching agreements with the city.
But other objectors remain, including bond insurers Syncora Guarantee Inc. and Financial Guaranty Insurance Co, which are continuing an effort to derail an expensive interest-rate swaps deal at a discount.
The two companies insured the swaps and $1.45 billion of pension debt associated with the swaps. Detroit needs the swaps deal in order to obtain a $350 million loan, some of which would be used to improve city services.
A few holders of $375 million of Detroit's pension debt also said Tuesday they were dropping their objection to the swaps deal after reaching an agreement with the city that would not prevent them from pursuing future claims.