Bankruptcy Judge Steven Rhodes yesterday approved Detroit's plan to borrow $120 million from Barclays PLC to improve services in the cash-strapped city, Reuters reported yesterday. Judge Rhodes overruled objections by city creditors who took issue with the timing and structure of the loan. Detroit has said that it plans to use some of the loan proceeds on public safety improvements. The loan deal emerged early last month after a larger loan was rejected in part by the judge in January. The previous loan, backed largely by city casino tax revenue, included $165 million that Detroit wanted to use to pay two investment banks to end soured interest rate swap agreements that contributed to the city's filing of the biggest municipal bankruptcy in U.S. history in July. Those swaps were used to hedge interest rate risk on some Detroit pension debt. In January, Rhodes ruled that the $165 million price tag was too high for the broke city.
