Detroit asks federal court to approve a deal stopping interest rate swaps
(Reuters) – Detroit on Monday asked a U.S. Bankruptcy Court judge to approve its third try at ending controversial interest rate swaps, laying out a plan that would cost the city just $85 million.
The cost to terminate the hedging deals with UBS AG and Merrill Lynch Capital Services is less than the city’s previous proposals, which were rejected by Judge Steven Rhodes, who is overseeing the city’s historic municipal bankruptcy case, as being too costly for the broke city.
In a court filing, Detroit said the investment banks agreed to vote for city’s debt adjustment plan, a move that could help the city force the plan on dissenting creditors.
(Reporting by Karen Pierog; Editing by Eric Walsh)
[Image: A man walks past graffiti in Detroit, Michigan, Dec. 3, 2013. By Joshua Lott for Reuters.]