Detroit got closer to resolving its record $18 billion municipal bankruptcy, reaching a deal with the insurer of taxpayer-backed bonds on how to treat debt holders, Bloomberg News reported on Saturday. Details are being put into final written form, according to a statement filed in court yesterday by mediators appointed to help broker an agreement. Since filing for bankruptcy last year, Michigan’s largest city has been negotiating with many of its biggest creditors, including unions, pension plans and some bondholders. The mediators didn’t say how much the bondholders covered by yesterday’s agreement, who are owed about $163.5 million, would recover or how much insurers would have to pay to cover any losses on the limited tax, general obligation bonds known as LTGOs. The city had previously estimated that without a deal, bondholders would get back as little as 10 cents on the dollar.
