Syncora is now on board

[professorscott]

Deal changer.

http://www.detroitnews.com/article/2...ankruptcy-deal

[Danny]

Syncora has no choice, accept the Grand Bargaining or get what's left of Detroit City Government's payment arraingments.

[Honky Tonk]

Syncora should go with the freep. They're giving them $.26 on the dollar.

[maverick1]

I found this interesting:

"The city also will give Syncora millions in return for the firm’s pledge to help fight bond insurer Financial Guaranty Insurance Co., which is fighting Detroit’s debt-cutting plan.

From The Detroit News: http://www.detroitnews.com/article/2...#ixzz3CrtxfNU8"

So, now that Syncora is squared away are they really going to help Detroit screw the other banks/financial institutions? What's in it for them to do this?

[lpg]

I found this interesting:

"The city also will give Syncora millions in return for the firm’s pledge to help fight bond insurer Financial Guaranty Insurance Co., which is fighting Detroit’s debt-cutting plan.

From The Detroit News: http://www.detroitnews.com/article/2...#ixzz3CrtxfNU8"


So, now that Syncora is squared away are they really going to help Detroit screw the other banks/financial institutions? What's in it for them to do this?

The jackels are eating each other,

[animatedmartian]

So, now that Syncora is squared away are they really going to help Detroit screw the other banks/financial institutions? What's in it for them to do this?

Money, duh.

It's now in Syncora's best interest to get this bankruptcy over with and start reaping the profits of this deal. If FGIC holds up the bankruptcy then that's holding up Syncora's profits.

[professorscott]

Money, duh.

It's now in Syncora's best interest to get this bankruptcy over with and start reaping the profits of this deal. If FGIC holds up the bankruptcy then that's holding up Syncora's profits.

I'm waiting for bankruptcyguy to weigh in on this, but my [[limited) understanding is that if you are the only holdout, it's difficult for you to do very much holding up of the resolution of this.

FGIC is in a very difficult position. Being last doesn't give them much leverage with which to bargain, so if any kind of deal is offered them at all, they'd be best off taking it. Syncora was smart to do what they did. They'll be better off, almost certainly, with what they negotiated than with what otherwise would have been crammed down their throats.

BG, what say you?

[BankruptcyGuy]

I'm waiting for bankruptcyguy to weigh in on this, but my [[limited) understanding is that if you are the only holdout, it's difficult for you to do very much holding up of the resolution of this.

FGIC is in a very difficult position. Being last doesn't give them much leverage with which to bargain, so if any kind of deal is offered them at all, they'd be best off taking it. Syncora was smart to do what they did. They'll be better off, almost certainly, with what they negotiated than with what otherwise would have been crammed down their throats.

BG, what say you?

Yes, FGIC will be in a very difficult position, because there would now be an issue that a creditor does not feel that a plan would violate the Chapter 9 rules, and another creditor SIMILARLY SITUATED does. It's not quite, but close, to the concept that the judge won't really believe FGIC's objections.

The Court is performing its own analysis, but I think the weight of the evidence is pretty clear.

[corktownyuppie]

I found this interesting:

"The city also will give Syncora millions in return for the firm’s pledge to help fight bond insurer Financial Guaranty Insurance Co., which is fighting Detroit’s debt-cutting plan.

From The Detroit News: http://www.detroitnews.com/article/2...#ixzz3CrtxfNU8"

So, now that Syncora is squared away are they really going to help Detroit screw the other banks/financial institutions? What's in it for them to do this?

Money. Or, more accurately, the perception that they are maximizing the money that they will get when this is over.

I'm sure anyone can Monday Morning Quarterback about whether or not they should have taken a deal earlier, but none of us know what deals were being offered. Who knows, the City may have been holding on to some sweeteners and just decided to play them at the last minute to see if Syncora would bite.

The two interesting things I see are the following:

[[1) We don't know how the Judge would rule in the bankruptcy proceedings, but it seems evident that Syncora realized that their position was getting worse, not better.

[[2) Syncora may have been willing to look not just at the present value of vacant land [[zero-to-negative) but rather the future profits that *could* be realized if they successfully develop it. In this way, it's a win-win for everyone...Detroit gives up something that's practically worthless, Syncora takes on the investment in a rebounding city, putting everyone on the same side. If people keep moving back downtown, Syncora will reap the profits from successfully developing riverfront real-estate...and the city gets someone with the cash to buy it.

[nain rouge]

OK, um, can anyone explain when Detroit will experience ANY negative side effects from declaring bankruptcy? Or should every city start hitting the bankruptcy jackpot?

[corktownyuppie]

OK, um, can anyone explain when Detroit will experience ANY negative side effects from declaring bankruptcy? Or should every city start hitting the bankruptcy jackpot?

Well, Detroit as a political institution has lost of all of its independence for the foreseeable future. Even after emergency management is over, our budgets will be overseen and require approval from a state-appointed board.

Bankruptcy has been [[and will be even moreso) good for Detroit-ers.
But if you were in political power before and compare it to the political power you have now, it's pretty rough.

I don't think any political leader wants that or themselves unless it's the last possible option out of desperation.

[DetroitPlanner]

Syncora should go with the freep. They're giving them $.26 on the dollar.

It is more than that the deal also involves revenues from the tunnel and parking.

[Honky Tonk]

It is more than that the deal also involves revenues from the tunnel and parking.

Both reports, Detroit Noose and the freep, are from from anonymous sources "close to the action". I'll wait until the official announcement before commenting. I am glad Syncora decided to fold. I'd like to see the City start heading in a more positive direction.

[professorscott]

Both reports, Detroit Noose and the freep, are from from anonymous sources "close to the action". I'll wait until the official announcement before commenting. I am glad Syncora decided to fold. I'd like to see the City start heading in a more positive direction.

I think the fact that Hon. Mr. Rhodes was asked for, and granted, a delay in order for the sides to finalize the deal is sufficiently official. Having said that, of course this deal is not finalized, and perils remain, but I am guardedly optimistic.

Which is as good as it gets, by the way. In 30 years of living in and around Detroit I've never felt better than guardedly optimistic about anything whatever.

[Honky Tonk]

I think the fact that Hon. Mr. Rhodes was asked for, and granted, a delay in order for the sides to finalize the deal is sufficiently official. Having said that, of course this deal is not finalized, and perils remain, but I am guardedly optimistic.

Which is as good as it gets, by the way. In 30 years of living in and around Detroit I've never felt better than guardedly optimistic about anything whatever.

A poster once made the comparison of breakthrough announcements in Detroit to Lucy pulling the football away from Charlie Brown @ the last minute.

[Willi]

Municipal Bonds are a weird entity in that no one ever expected a city to default.
Upon default, the only real asset, is city owned land, and no creditor wants empty lots.
Creditors KNEW what they were getting into, and now cry over getting burned by the risk.
No sympathy for any of them.

Generally speaking, municipal bonds are considered safer than corporate bonds,
for the simple fact that governments are less likely than companies to fail
and default on their obligations. ALL of them knew that before buying DETROIT bonds

[animatedmartian]

Interesting statement by FGIC after the city made the deal with Syncora;

​Backed into a corner, FGIC, which could lose more than $1 billion on Detroit debt it insured, has dwindling prospects to get paid off.

“We have always been, and remain, open to good-faith settlement discussions with the city,” FGIC said in a statement Wednesday. “The latest deal reinforces our view that the city has abundant sources of incremental value available for distribution” to financial creditors."

http://www.freep.com/article/2014091...y-Syncora-FGIC

Of course incremental being the keyword here. I can't really tell, but this doesn't seem to imply that they'll continue to holdout but at the same time it almost sounds like they believe they will still get a good deal. Maybe they'll just avoid admitting defeat and come out and say "Oh, we meant to reach a deal like this!" whatever that deal turns out to be.

[Willi]

CrainsDetroit.com hit it square on the head today :

“The majority of the city’s water mains are between 70 and 90 years old and failing at a rapid rate. Detroiters have suffered through more than 5,000 water main breaks in just the last three years. Rebuilding 1 percent [[30 miles) of its system each year at a cost of about $25 million would have put the city on par with the national average. However, DWSD has spent no more than $3.4 million in each of the last three years to rebuild its mains.”

Does Metro Detroit want driveable roads, clean water to drink, or the toilets to flush ..........................?

http://www.detroitmi.gov/GreatLakesWaterAuthority.aspx

[Willi]

If people think they live on an island, immune and detached from the rest of the state;
- then maybe they SHOULD NOT get the refinancing via State Municipal Bond ratings either.

http://www.detroitnews.com/article/2...it-water-bonds

[animatedmartian]

Syncora now issuing a formal apology to the mediators of the Grand Bargain for accusing them of favoritism towards retirees and the DIA. An apology almost to the point of kissing ass.

http://www.freep.com/article/2014091...ent-bankruptcy