Judge to decide on Detroit's deal to pay off debt

Judge to decide on Detroit's deal to pay off debt

Posted: Updated:
Judge Steven Rhodes Judge Steven Rhodes

DETROIT (AP) -- The bankruptcy judge overseeing Detroit's restructuring plans to issue his decision on a renegotiated interest rate swaps deal that could save Detroit millions of dollars.

A spokesman says Judge Steven Rhodes will rule from the bench Thursday afternoon on the $165 million deal reached last month with UBS and Bank of America Merrill Lynch.

The complicated deal before Rhodes involves the city's pledge to use casino tax revenue as collateral to avoid defaulting on pension debt. The swaps let Detroit get fixed interest rates on pension bonds.

An initial $220 million payoff was reached, but Rhodes said the city could do better.

State-appointed Detroit emergency manager Kevyn Orr says the deal is critical. He filed for bankruptcy protection in the face of a long-term municipal debt of about $18 billion.

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