The city of San Bernardino reached a settlement in its municipal bankruptcy on Tuesday that gives pension bondholders a 60 percent haircut, Reuters reported yesterday. The deal reduces the city's payments to pension bondholders by $45 million. The payments will be made over 30 years, starting one year after San Bernardino's chapter 9 plan is confirmed, according to the city. "The settlement will end the costly legal battles between the City and the settling creditors over confirmation of the City's Chapter 9 Plan of Adjustment, as well as how much the creditors are to be paid," City attorney Gary Saenz said in a statement. San Bernardino declared bankruptcy in 2012 with a $45 million deficit. Along with Detroit and Stockton, its bankruptcy has been closely watched by the $3.6 trillion U.S. municipal bond market.
