Feb 20 (Reuters) - Detroit’s state-appointed emergency manager expects to file a roadmap in federal court on Friday detailing how the city will treat some $18 billion of debt and other obligations as it tries to exit bankruptcy, a city spokesman said on Thursday.
“Friday is the present expected day to file,” said Bill Nowling, a spokesman for Kevyn Orr, the city’s emergency manager.
Judge Steven Rhodes, who is overseeing Detroit’s bankruptcy case -- the largest municipal bankruptcy in U.S. history -- set a March 1 deadline for the plan.
The city sent a proposed plan to adjust its debts to creditors on Jan. 29. A copy of the confidential proposal obtained by Reuters indicated that Detroit’s largest unsecured creditors, its two pension systems, would fare better than owners of city bonds.
The city said the proposed plan reflected discussions with creditors and said it could be modified before being presented in court.
The proposal excluded interest-rate swap agreements from the settlement plan after Rhodes twice rejected deals between the city and swap providers to end them at a discounted cost.
However, an attorney representing Detroit told Rhodes on Wednesday that a new deal with UBS AG and Merrill Lynch Capital Services over the swaps would be revealed soon.
The swaps, which were used to hedge interest rate risk on some of the $1.45 billion of pension debt Detroit sold in 2005 and 2006, soured when interest rates and the city’s credit ratings fell.
The money the city owed the investment banks has been a key element in the bankruptcy case. Detroit on Jan. 31 filed a lawsuit seeking to invalidate the pension debt.