Bankrupt Detroit Pins Hopes on Financing From Barclays
Detroit — bankrupt as of July 18, 2013 — is set to receive up to $350 million in debtor-in-possession financing from Barclays Plc (NASDAQ:BCS). Kevyn Orr, Detroit’s state-appointed emergency manager, has said that the money will be put towards ending interest-rate swap agreements that have proven unhealthy for Detroit, as well as towards investments in infrastructure.
According to Reuters, the $230 million portion of the DIP financing from Barclays Plc put towards ending swap contracts would close out contracts with Merrill Lynch Capital Services and UBS AG (NYSE:UBS). Speaking on behalf of Orr, Bill Nowling said that court mediation with Syncora Guarantee Inc. – a bond and swap insurer and the main objector to the contract closures — is proceeding.
Back in September, when Detroit initiated the the present set-up with these two facets of Bank of America (NYSE:BAC), the move was met with some protest. However, at that time Syncora asserted that the deal favored Detroit, removing $180 million per year in casino revenue.