Quote Originally Posted by Eber Brock Ward View Post
If you are a fan of the city getting out from under its mountain of debt:

- It looks like the deal that Rhodes denied was reported to be about 75 cents on the dollar, resulting in about $230 million to UBS and BoA Merrill Lynch [[http://www.freep.com/article/2013121...financing-debt)
- That would mean that there is about $307 million outstanding to those two banks.
- The new proposed deal is about $165 million [[http://www.detroitnews.com/article/2...165M-bank-deal)

Using math, it would appear that the new deal is a bit under 54 cents on the dollar for two apparently SECURED creditors[[!). If Rhodes accepts this deal, the impact on the remaining unsecured creditors cannot be overstated, as it would essentially set an absolute ceiling at 54 cents on the dollar for folks like the other bondholders, the pensioners, and other claimants.

If you accept Orr's position that the city owes $18B in debt, containing about $6B in health care liability, the city's post-bankruptcy liabilities may be even less than $6B dollars or so [[$18B minus the $6B in health care, minus an additional ~50 cents/dollar on the other $12B in liabilities).

Great for the city to get out from 2/3 or more of its liabilities, but not so much for the creditors.
$6B is tied to debt for the DWSD. I don't believe this will be negotiated down as it is tied to stable revenues. Now DWSD may be spun off/sold and the debt would go with the deal which would lower the total to $12BB to be negotiated.