Detroit’s bid to stick investors with losses as part of an effort to avert a historic bankruptcy is jeopardizing municipal bond insurers’ recovery prospects, Bloomberg News reported yesterday. Insurers, including Assured Guaranty Ltd. and FGIC Corp., are on the hook for at least 95 percent of the $2 billion of unsecured Detroit debt that wasn’t issued for city utilities, data compiled by Bloomberg show. Kevyn Orr, the city’s emergency financial manager, proposes paying investors less than 20 cents on the dollar on those bonds as the auto-industry capital bleeds cash.
