Oh, Snap. Orr says, "How about I give you dimes for dollars, and we can call it even?

**aj3647** · June-07-13, 10:32 AM

Good luck finding lenders to give the city money after this, though.

**motz** · June-07-13, 10:37 AM

Originally Posted by aj3647

Good luck finding lenders to give the city money after this, though.

I think this is a good solution to Detroit's "Lets go to the pay day lender to pay our bills" issue they seem to have had for a bit here. I hope the creditors end up with pennies on the dollar, they knew what they were getting themselves into and still did it anyway.

**Honky Tonk** · June-07-13, 10:37 AM

Originally Posted by aj3647

Good luck finding lenders to give the city money after this, though.

Good luck finding them now.

**corktownyuppie** · June-07-13, 10:39 AM

Originally Posted by aj3647

Good luck finding lenders to give the city money after this, though.

Um, I think that's a good thing. It means that we will not be able to borrow money for the near- to- intermediate future without a co-signer. Which is a good thing, because it means the co-signer can now control how funds are spent. This co-signer, free from the dysfunctional political environment, can be motivate primarily by effectiveness, efficiency, optimization of service....instead of political loyalty, ideological rhetoric, and delusion.

Which is also a good thing.

**michimoby** · June-07-13, 10:48 AM

Originally Posted by corktownyuppie

Um, I think that's a good thing. It means that we will not be able to borrow money for the near- to- intermediate future without a co-signer. Which is a good thing, because it means the co-signer can now control how funds are spent. This co-signer, free from the dysfunctional political environment, can be motivate primarily by effectiveness, efficiency, optimization of service....instead of political loyalty, ideological rhetoric, and delusion.

Which is also a good thing.

Who's going to co-sign, though?

Actually, I should dig into this more: on municipal debt, I assume it's the city/county Treasurer that puts his/her name to the document; can another municipality's Treasurer co-sign?

**313WX** · June-07-13, 10:56 AM

Originally Posted by michimoby

Who's going to co-sign, though?

Actually, I should dig into this more: on municipal debt, I assume it's the city/county Treasurer that puts his/her name to the document; can another municipality's Treasurer co-sign?

The state of Michigan can co-sign the bonds.

**michimoby** · June-07-13, 11:13 AM

Originally Posted by 313WX

The state of Michigan can co-sign the bonds.

And what if the state refuses to do so? Can Detroit have a private citizen co-sign?

**mwilbert** · June-07-13, 11:18 AM

After the city renegotiates its debt, assuming it does, it will have greater access to the credit markets than it has now, not less. Prospective lenders won't have to worry the old debt that no longer exists.

You may think that future lenders will exact a price for that, but you have to realize that lenders already know that Detroit is not creditworthy. Dealing with the problem just makes the situation more predictable.

**313WX** · June-07-13, 11:35 AM

Originally Posted by michimoby

And what if the state refuses to do so? Can Detroit have a private citizen co-sign?

The state of Michigan co-signed the BofA bond that the city has been using to function since the consent agreement.

For the state, it would be preferable over Detroit's bankruptcy, where everyone's credit would be damaged because of Detroit and the legal fees are more expensive.

**TKshreve** · June-07-13, 12:26 PM

Originally Posted by michimoby

And what if the state refuses to do so? Can Detroit have a private citizen co-sign?

I heard Jack White is in the giving mood.

**Honky Tonk** · June-07-13, 12:29 PM

Originally Posted by michimoby

And what if the state refuses to do so? Can Detroit have a private citizen co-sign?

My Mom cosigned for me one time, I could ask.

**corktownyuppie** · June-07-13, 11:12 AM

Originally Posted by michimoby

Who's going to co-sign, though?

Actually, I should dig into this more: on municipal debt, I assume it's the city/county Treasurer that puts his/her name to the document; can another municipality's Treasurer co-sign?

On municipal debt, I believe that entity Treasurer signs document, but to be legal, it must be accompanied by documentation equivalent of some official resolution or minutes of meeting confirming resolution that necessary governmental bodies [[Mayor/City Council, etc.) approved bond issuance in accordance with municipal law.

As far as co-signer, anyone can co-sign a loan. The question is whose co-signature will the lenders accept? I agree with 313WX here, most likely co-signer is the state because of its credit rating. But any entity or individual could theoretically co-sign a loan.

"$100B Restructuring Bond Issuance Receives Michimoby Guarantee: Bond Rating jumps from CCC- to CCC!"