Detroit prepares for court hearing on swaps termination
Court will rule on compromise agreement between bankrupt city and swaps counterparties
The City of Detroit is hoping a court hearing tomorrow clears the way for it to terminate interest rate swaps with UBS and bond underwriter SBS Financial Products at a 25% discount, which the city estimates could save it in the region of $70 million. The termination rights were granted to the city by its counterparties in a forbearance agreement on July 15, three days before it filed for Chapter 9 bankruptcy protection.
The city and its counterparties believe approval is not technically required
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