Municipal Bond Forum
Detroit plan subject to court ruling
Q
Excellent article (“Investors in Michigan Munis Strike Back“), clarifying the unintended consequences of the Detroit approach to bankruptcy. In addition to the obvious chilling effect this is having on the municipal bond market in Michigan, I reckon it is also having a negative impact on the broader muni bond market. If the current plan goes through, it is a game changer for muni bonds everywhere.
A
James A. Klotz responds:
We are not convinced that U.S. Bankruptcy Judge Steven Rhodes will rule that voter approved, general obligation bonds will be considered unsecured debt as outlined in the proposal by Detroit’s emergency manager. Naturally, we will be monitoring this situation closely.
Start here.
Do you have specific criteria for bonds you’re looking for? Let us know and we’ll e-mail you bonds that fit your needs. There is no charge for this service.
The responses provided in this forum are meant to address specific questions posed by investors about their municipal bonds and to provide market insight for our general audience. Please note, your investments, objectives, results and experience may differ significantly. Our answers and any potential strategies discussed should not be construed as a solicitation to buy nor sell any security or investment product. All investing entails risk.