DETROIT - Detroit Emergency Manager Kevyn Orr announced Thursday that the city had secured a $275 million Chapter 9 Exit Financing Bond Facility commitment from Barclays Capital Inc.
The City's Plan of Adjustment filed with United States Bankruptcy Court for the Eastern District of Michigan contemplates that, as part of the implementation process, the city will obtain exit financing through the issuance of financial recovery bonds upon its emergence from bankruptcy protection. The bonds will be issued by the Michigan Finance Authority.
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The city expects that the net proceeds of the Exit Facility will be used to fund:
- The retirement of the City's $120 million post-petition financing facility;
- Certain of the City's reinvestment and revitalization initiatives; and
- The City's obligations with respect to certain classes of claims under the Plan of Adjustment.
It is expected that up to $200 million of the exit facility will be tax-exempt.
"Detroit continues to make steady progress in returning to firm financial footing and becoming an attractive place to invest once again," said Orr. "We are very pleased to have secured this Exit Facility and are encouraged by the reception we received from the broader financial community. We look forward to deploying these funds in our ongoing effort to make Detroit a viable and strong American city once again."
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