Stockton, Calif. city council approves plan to exit bankruptcy

STOCKTON, Calif. Thu Oct 3, 2013 10:52pm EDT

STOCKTON, Calif. Oct 3 (Reuters) - Stockton, California's city council approved a plan on Thursday for the city to adjust its debt to exit from bankruptcy after reaching a deal with bond insurer Assured Guaranty to restructure more than $150 million of outstanding debt.

The deal marks the end of a long and often bitter fight between Stockton and its biggest bond insurers since the city filed for bankruptcy last year and stunned the U.S. municipal debt market with threats of forcing losses on bondholders while leaving pension payments intact.

"Now we have deals with every bond insurer that's involved in the bankruptcy process," Stockton City Manager Bob Deis said, adding he is hopeful the city is on track to exit bankruptcy in about six months.

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