Detroit to Pay Barclays Fee of 1.25 Percent for LoanSteven Church
Detroit, the biggest U.S. city to file for bankruptcy, agreed to pay Barclays Capital Inc. a 1.25 percent fee to borrow as much as $350 million, according to court records.
The fee will be applied to two sets of notes that the city plans to issue to raise money to bolster public services and buy its way out of interest-rate swap contracts that have cost it $50 million annually.
The city will pay Barclays 1.25 percent of the amount of each set of notes, according to a fee letter filed today in U.S. Bankruptcy Court in Detroit. The exact amount of each set of notes has not yet been set and will depend on the final cost to end the interest-rate swaps.
U.S. Bankruptcy Judge Steven Rhodes last week denied Detroit’s request to file the letter under seal, saying it would normally be released under Michigan’s Freedom of Information Act. Fee letters are often sealed in corporate bankruptcies.
Detroit filed the biggest municipal bankruptcy in U.S. history in July, saying it couldn’t repay all of its $18 billion in debt and still provide basic services.
The case is In re City of Detroit, 13-bk-53846, U.S. Bankruptcy Court, Eastern District of Michigan (Detroit). For Related News and Information: