Detroit gets court OK to repurchase $1.47 billion water supply bonds

By Kali Hays

New York, Aug. 25 – The City of Detroit received court approval to exchange $1,467,670,000, or 28%, of its outstanding Detroit Water and Sewage Department water supply system bonds, according to an attorney familiar with the case.

As previously reported, the city said that bondholders had tendered the approved amount as of Aug. 21, the deadline of its previously announced tender offer.

The city accepted the tendered bonds Aug. 22, and settlement is slated for Sept. 4, according to a previous announcement.

Assured Guaranty Municipal Corp. and National Public Finance Guarantee Corp. are insurers of the bonds.

The city said it believes a sufficient amount of Detroit Water and Sewerage Department bonds have been tendered to achieve acceptable economic savings.

Judge Steven Rhodes overruled the sole objection of bond insurer Syncora Guarantee Inc., saying it had no standing to object as it was not going to suffer any injury from the tender offer, according to the attorney.

Detroit filed for bankruptcy on July 18, 2013 under Chapter 9 case number 13-53846.

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