DETROIT, Aug 29 (Reuters) - Detroit, which has filed for the largest Chapter 9 bankruptcy in U.S. history, will issue a request for proposals on Thursday to borrow $350 million that will be used to terminate a complicated swaps deal and give funding for “quality of life” improvements in the city, the emergency manager’s office said.
The termination payment would be made to Merrill Lynch, a unit of Bank of America, said the spokesman for Kevyn Orr, emergency manager for the city who has most of the power once afforded to the mayor and the city council.
“Our goal is to fund the swap settlement and provide the city with adequate liquidity throughout the restructuring case to start reinvesting in Detroit today,” said Bill Nowling, Orr’s press secretary.
“The city is contacting a range of financial institutions, commercial banks, investment banks and hedge funds. This would be the first post-petition Chapter 9 financing of which we are aware,” Nowling said in an e-mail to Reuters.