Bankers who sold Detroit interest rate swaps placed "a ticking time bomb" in their structure, the city's emergency manager said in court as a trial resumed over a proposal for canceling the transaction.
Although the city collected $40 million over eight months from the swaps deal, falling interest rates helped the banks behind the deals turn a profit, Kevyn Orr, the emergency manager, testified today before U.S. Bankruptcy Judge Steven Rhodes in Detroit.
Since 2009, the city has paid more than $200 million to the banks behind the swaps, according to public records. The city has proposed paying UBS AG and Bank of America Corp. a $165 million termination fee to get out of the swaps contract.
Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.
Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
- Exclusive discounts on ALM and Treasury & Risk events.
- Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.
*May exclude premium content
Already have an account? Sign In
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.