Detroit to Pay $77 Million in Swaps Accord With UBS, BofA
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Detroit agreed to pay $77.6 million to UBS AG and Bank of America Corp.’s Merrill Lynch unit to end interest-rate swaps that have cost the bankrupt city’s taxpayers more than $200 million since 2009.
The settlement, which is a 70 percent reduction of what the city was liable for under the swaps agreement, will release Detroit from claims by the banks and provide “greater certainty with respect to the city’s cash flows and liquidity,” Detroit said in a filing yesterday seeking approval for the accord from U.S. Bankruptcy Judge Steven Rhodes. The payments will be made over time, rather than in a lump sum, according to the filing.