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Detroit’s $85 million swaps deal not yet final, lawyer says

The swaps, tied to pension obligation bonds issued in 2005 and 2006, were designed to protect against rising interest rates by requiring the banks to pay the city if rates rose above a certain level.

By Steven Church and Steven Raphael | Updated on March 20, 2014

March 20 (Bloomberg) — Detroit’s proposal to pay $85 million to cancel interest-rate swaps that cost taxpayers more than $200 million, part of the city’s attempt to trim debt in bankruptcy, won’t be in final form until next week.

The city has struggled to get final wording for the deal with UBS AG and Bank of America Corp.’s Merrill Lynch unit, attorney Robert S. Hertzberg told U.S. Bankruptcy Judge Steven Rhodes today. Rhodes asked how he could be certain that the city will be ready to seek approval at an April 4 hearing.

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