Detroit’s Bankruptcy Losers Vote on City’s PlansWilliam Selway
The bankruptcy of Detroit, a capital of U.S. industry that collapsed after a decades-long population exodus, rippled beyond its borders.
Other Michigan municipalities shelved debt sales when investors grew queasy after the $18 billion filing. Bondholders tried to understand the meaning of credit pledges. Public workers braced for cuts to pension benefits that could set a precedent for other ailing towns.
A year on, no city has followed Detroit’s path, the $3.7 trillion muni market has rallied and retirees are emerging with less of a hit than many foresaw -- even as some bondholders are set to receive as little as 11 percent of what they had coming.
Was the shake fair? Detroit is set to release the results of a creditor vote today on its plans to emerge from the financial ruins. The results will guide U.S. Judge Steven Rhodes as he considers whether to approve the city’s plan when a trial begins next month.
State leaders around the nation have been fretting about another cash-strapped government entity: the federal government’s highway trust fund, which would be forced to begin cutting off payments for road projects next month if Congress can’t agree on a way to shore it up.
The efforts shift to the Senate, after the House approved a bill last week to keep the project funded through May.
Municipal-bond yields dropped last week as investors shifted money to safe havens after a commercial Malaysian airline was shot down over Ukraine. Ten-year yields ended the week at 2.3 percent, according to Bloomberg benchmarks, down from 2.37 percent a week before.
Among those who may benefit: Maryland, the AAA rated state, which is selling about $900 million of bonds this week, the largest offering of municipal securities.
San Francisco is looking to grim matters: The California Mental Health Services Oversight and Accountability Commission considers July 24 whether to pay $7 million to build an anti-suicide barrier for the Golden Gate Bridge, whose vistas and footpaths have been a longtime draw for those looking to end their lives.
That same day, New Jersey’s Chris Christie, Wisconsin’s Scott Walker and other Republican governors head to Aspen, Colorado, to chat about the economy, schools, taxes, and immigration.
Infrastructure isn’t on the agenda. Bridges in particular.
Working to clear a longtime grievance of air travelers to Los Angeles, the Metropolitan Transportation Authority (not to be confused with the New York version) will vote on spending $3 million to clear the way for a monorail that would link the airport to the city’s light-rail network. Currently, travelers have to take more paleolithic wheels, a bus. Few do.