Barclays Plc will provide cash-strapped Detroit with up to $350 million in debtor-in-possession financing in the wake of its municipal bankruptcy filing in July, Reuters reported on Friday. Detroit will use the money for infrastructure investments and to terminate interest-rate swap agreements that were not advantageous for the city, said Kevyn Orr, the city's state-appointed emergency manager. About $230 million of the financing's proceeds will be used to end swap contracts the city entered into with Bank of America Corp.'s Merrill Lynch Capital Services and UBS AG in conjunction with debt sold for Detroit's public pension funds. Bill Nowling, Orr's spokesman, said the DIP financing was needed for the city to execute the swap termination deal with Merrill Lynch and UBS that Detroit asked the bankruptcy court to approve it over the objection of bond insurers, some bondholders, the pension funds and others. He said court mediation with bond and swap insurer Syncora Guarantee Inc., the main objector, was continuing. Without the deal, terminating the swaps could cost an additional $60 million.
