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To try to keep detroit, and successfully kept detroit investment grade rated. that was 23 years ago. they have severe structural problems. to enter a transaction like that, it s not an interest rate bet, it was a bet on staying solvent. and they lost that bet. quickly, is there a way for detroit to pay the promise to it s retirees and get out of this? well, yes there is. so there are several aspects to it. you have to be creative about how you drive down their catch throw deficit. but the way to do it, and tragically the bankruptcy court can t order the state to kick in a little money, to put back the $47 million they paid, that s the way to do it. ....
Principal was paid to the bondholders. the deal with the banks on wall street, it s as if you have a mortgage and you pay your interest to someone else. if you got nicked, all of the interest for 20 years would come due today. you re detroit, you re hovering over getting a downgrade, and the structure of the deal was you can borrow this money, but the day after you get downgraded you have to pay us everything due. yeah, they don t have that kind of money. i in 1990 i did a transaction to try to keep detroit, and successfully kept detroit investment grade rated. that was 23 years ago. ....
2005. half of that, for half of that, they made a deal where it was under a derivative. they paid the banks on wall street the interest and the principal was paid to the bondholders. the deal with the banks on wall street, it s as if you have a mortgage and you pay your interest to someone else. if you got nicked, all of the interest for 20 years would come due today. you re detroit, you re hoovering over getting a downgrade, and the structure of the deal was you can borrow this money, but the day after you get downgraded you have to pay us everything due. yeah, they don t have that kind of money. i in 1990 i did a transaction to try to keep detroit, and successfully kept detroit investment grade rated. ....