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.
Continue Reading for Free
Register and gain access to:
- Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
- Informative weekly newsletter featuring news, analysis, real-world cas studies, and other critical content
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
*May exclude premium content
Already have an account?
Sign In Now
© 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.
