DETROIT, Sept 3 (Reuters) – Detroit had no choice but to
strike a deal with holders of interest-rate swaps contracts as
the city scrambled to guarantee access to cash in the days
before its bankruptcy filing, according to depositions by the
city’s emergency manager and a key financial adviser.
The city has asked the federal judge overseeing its historic
municipal bankruptcy filing to approve the deal with Merrill
Lynch and UBS AG, which would allow Detroit to end the swaps at
a discount and give it unfettered access to casino tax revenue.
The casino money served as collateral for the swaps contracts.
CHICAGO, Aug 14 (Reuters) – Chicago bond prices are falling
in the U.S. municipal bond market as investors fret about the
city’s growing public pension burden.
Trades of certain Chicago general obligation bonds this week
have pushed the city’s so-called credit spread over Municipal
Market Data’s benchmark yield scale for triple-A-rated debt to
more than 190 basis points in the intermediate maturity range
from levels around 160 basis points.
By Karen Pierog
(Reuters) – A court hearing on Friday may provide a roadmap for how Detroit’s historic bankruptcy filing will unfold as the judge overseeing the case could set a speedy schedule, appoint a mediator and rule on other matters.
The hearing in U.S. Bankruptcy Court is a key step toward Detroit Emergency Manager Kevyn Orr’s effort to see the city emerge from the largest U.S. municipal bankruptcy filing in history by September 2014. But Detroit must first prove it qualifies to file for bankruptcy and then file a reorganization plan.
CHICAGO, July 25 (Reuters) – Illinois lawmakers will not get
paid on Aug. 1 after Democratic Governor Pat Quinn refused to
approve their monthly compensation because they failed to reach
a deal to clean up the state’s dismal finances, Illinois
Comptroller Judy Baar Topinka said on Thursday.
“This is no way to run government,” Topinka, a Republican,
said at a news conference, adding that she had no authority to
pay lawmakers over the objections of the governor.
DETROIT (Reuters) – Detroit’s historic municipal bankruptcy filing on Thursday came less than 10 minutes before lawyers for the city’s pension funds and retirees had rushed to another court to try to block it.
The bare bones bankruptcy petition, which came at 4:06:22 p.m., blindsided everyone in the room, according to two lawyers who were in state court in Lansing, Michigan, at the time. Even the lawyer representing the governor and the judge were caught unaware.
(Reuters) – The city of Detroit filed a lawsuit against bond insurer Syncora Guarantee Inc claiming the company blocked an agreement the city hopes to conclude with major creditors involving revenue from the city’s three casinos.
The suit filed on Friday by Detroit’s state-appointed emergency manager, Kevyn Orr, focuses on the city’s estimated $15 million a month casino tax revenue. The city maintains Syncora told U.S. Bank, which controls the casino funds that were used as collateral in a deal with creditors, not to give up to $11 million a month to Detroit.
CHICAGO, June 24 (Reuters) – Illinois’ biggest bond sale so
far this year will hit the U.S. municipal market on Wednesday
amid rising interest rates and concerns the state’s already low
credit ratings could erode further as lawmakers struggle to come
up with a fix for a huge public pension problem.
Credit worries coincide with a steep price drop in the $3.7
trillion municipal bond market that has lifted yields on bonds
due in 10 and 30 years to levels not seen since 2011 in
expectations the U.S. Federal Reserve will soon pull back on its
expansionary monetary policy.
, June 19 (Reuters) – In the first sign of
compromise after weeks of political impasse, Illinois lawmakers
in a special session on Wednesday set up a rarely used
conference committee in an effort to fix the state’s woefully
under-funded pension system.
Legislative leaders agreed to a July 9 deadline for action
on the state’s $100 billion pension under-funding, and the
state’s Democratic governor, Patrick Quinn, said he plans to
call legislators back for another special session in early July.
CHICAGO, June 10 (Reuters) – The Illinois public pension
system, the worst funded among U.S. states, will be tackled with
a two-prong approach that addresses both cost-savings and
constitutional concerns during a special legislative session
next week, state officials said on Monday.
But the measure, which will start in the Senate, may not
even be voted upon in the House, where Speaker Michael Madigan
said a bill his chamber passed in May to make unilateral changes
to retirement benefits was the right approach to address the
state’s nearly $100 billion unfunded pension liability.
CHICAGO, June 3 (Reuters) – Illinois’ lowest-among-states
credit rating took a new hit on Monday as Fitch Ratings
downgraded the state’s credit just days after Illinois lawmakers
left the state capitol last week without addressing a huge
public pension funding crisis.
“Fitch believes that the burden of large unfunded pension
liabilities and growing annual pension expenses is
unsustainable, and that failure to achieve reform measures
despite the substantial focus on this topic exacerbates concern
about management’s willingness and ability to address the
state’s numerous fiscal challenges,” the rating agency said in a