Not surprising. The debt is secured - that gives it higher priority legally.Under Emergency Manager Kevyn Orr's proposal last week to restructure the insolvent city's finances, the payments get priority over promises to retirees and holders of unsecured debt, including the pension borrowings. Being ranked among secured creditors gives the banks the same protection as investors in water and sewer bonds or general obligations secured by liens on state aid.
http://www.crainsdetroit.com/article...oit-bankruptcy
However THIS made me sick:
Wow. The City basically took a shitty pay day loan. $250M turns to $878.7M??? I'm astounded. I'm sure the bank quickly sold that debt stream off for a cool $500M and laughed their asses off.In 2009, facing a possible swap-termination fee equal to one-fourth of its budget, the city pledged the gambling-tax revenue as collateral. Since then, the city has been paying about $50 million a year, with $878.7 million expected through 2035, according to Orr's report. The city budgeted about $57 million for public lighting this year.
I only pray they find corruption under this deal [[not unlikely). If they do, there's a possibility that could cancel out the entire debt, as happened with Chase Bank down in Bama.
Bookmarks