Detroit Reaches Deal With Bond Insurer Over Pension Debt

Detroit reached an agreement with one of the major hold-out creditors in its bankruptcy case, bringing the city one step closer to exiting court protection, according to news reports Thursday that cited statements from the city's attorney. Financial Guaranty Insurance Co., which insures bonds issued by the city to shore up its pension fund, had objected to its treatment under the city's restructuring plan, saying the city owed it over $1 billion. Detroit plans to pay a small fraction of the amount owed to investors on those bonds, leaving the bond insurer on the hook for the rest. Details were sparse on what the bond insurer would receive in exchange for going along with the bankruptcy plan.