29th Aug 2014 05:37
LONDON (Alliance News) - Barclays PLC has committed USD275 million in financing to Detroit to exit from its bankruptcy after it gets court approval for its debt reduction plans at a trial beginning next week.
Detroit filed the biggest municipal bankruptcy in US history last year. It now seeks court approval to cut over USD7 billion of its USD18 billion obligations to certain creditors, including retired city workers and bondholders.
Financing from Barclays will be used to pay off USD120 million it borrowed for reorganisation, and to pay some creditors and revitalise the city.
Tax exempt bonds will be issued as part of the financing. These bonds will pay an interest rate equal to a municipal swap index, plus 4.25%. Meanwhile, taxable bonds will be based on Libor, plus 4.75%.
Copyright RTT News/dpa-AFX
Related Shares:
Barclays