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BLOOMBERG: Detroit Default Threatens Underpinnings of Municipal Bond Market

BLOOMBERG: Detroit Default Threatens Underpinnings of Municipal Bond Market

By Brian Chappatta & Martin Z. Braun - Jun 16, 2013 9:01 PM PT

Emergency Manager Kevyn Orr’s plan to suspend payments on $2 billion of Detroit’s debt threatens a basic tenet of the $3.7 trillion municipal market: that states and cities will raise taxes as high as needed to avoid default.

Orr, appointed by Republican Governor Rick Snyder to oversee Michigan’s largest city, proposed a deal last week that included skipping a $39.7 million payment on pension-obligation debt. The city is also set to default on unsecured unlimited-tax and limited-tax general-obligation bonds as it grapples with $17 billion in liabilities to avoid a record bankruptcy.

Read more: http://www.bloomberg.com/news/2013-06-17/detroit-recovery-pl...



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He is probably laying the

He is probably laying the groundwork for a bailout of all these liberal cities.

The human race divides politically into those who want people to be controlled and those who have no such desire. - Heinlein