Detroit, the biggest U.S. city to file for bankruptcy, updated its debt-cutting plan with details about its offer to exchange more than $5 billion in water and sewer bonds for new debt and said a deal on a new water agency may emerge from mediation talks with its suburbs, Bloomberg News reported yesterday. The city will agree to form an agency to take over its water and sewage department only if the surrounding suburban counties of Macomb, Oakland and Wayne agree to drop opposition to the debt-cutting plan. The counties object to the plan, claiming it might raise their residents’ water or sewage rates. Bondholders had through yesterday to decide whether to exchange their debt. Under the refinancing plan, the city will raise $5.5 billion, about $190 million of which will be used to improve its sewage-disposal system. The rest will be used to replace the old bonds on similar terms.
