UPDATE: Judge Approves Detroit Debt Swap Deal With Two Banks - WLNS TV 6 Lansing - Jackson | Your Local News Leader

UPDATE: Judge Approves Detroit Debt Swap Deal With Two Banks

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DETROIT (AP) - A federal judge has approved bankrupt Detroit's plan to settle a bad multi-million dollar pension debt deal with two banks.

Judge Steven Rhodes made his decision Friday morning on the city's agreement to pay $85 million to UBS and Bank of America.

Rhodes has denied earlier proposals for $220 million and $165 million settlements.

Detroit had pledged casino tax revenue in 2009 as collateral to avoid defaulting on pension debt payments, which allowed the city to get fixed interest rates on pension bonds with the banks. But the deal became too costly when interest rates plunged.

The so-called swaps deal is a key to Orr's plan to restructure Detroit's debt. The two banks have said they will support Orr's plan.

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