WASHINGTON, April 9 Detroit has reached a settlement with three bond insurers on $388 million of its unlimited tax general obligation bonds, a court-appointed mediator said on Wednesday
Under the agreement with National Public Finance Guarantee Corp., a unit of MBIA Inc., Assured Guaranty Municipal Corp. ; and Ambac Assurance Corp. approximately 74 percent of the bonds would be reinstated at their current terms, equal to $287.5 million.
The remaining 26 percent would be assigned to establishing an income stabilization fund for the city's "most vulnerable retirees," according to the statement from the U.S. District Court for the Eastern District of Michigan.
The insurers sued Detroit, which filed for bankruptcy last July, in November saying the city was illegally diverting voter-approved property taxes to the general fund. (Reporting by Lisa Lambert; Editing by James Dalgleish)