Swaps Deal Will Save Detroit From Insolvency-Mayor
CHICAGO, April 13, 2009 [[Reuters) - Detroit Mayor Kenneth Cockrel Jr called on the city council on Monday to approve a deal that will allow the city to avoid paying a financially crippling $400 million in termination payments for interest rate swaps.
Cockrel said the agreement in principle reached last month saves Detroit, which is already facing a projected $300 million accumulated deficit, from financial insolvency and from likely intervention by the state of Michigan.
Joseph Harris, Detroit's chief financial officer, said the agreement, which should be presented to the council in a few weeks,
requires the city to appropriate payments annually on the swaps and to post collateral for those payments from its wagering tax....... [
source].