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Ruling on Detroit bankruptcy swap deal expected Thursday

A image of the Detroit skyline is seen on the podium where Detroit Emergency Manager Kevyn Orr and Michigan Governor Rick Snyder addressed the media about filing bankruptcy for the city of Detroit during a news conference in Detroit, Michigan July 19, 2013.
Credit: Reuters/ Rebecca Cook
A image of the Detroit skyline is seen on the podium where Detroit Emergency Manager Kevyn Orr and Michigan Governor Rick Snyder addressed the media about filing bankruptcy for the city of Detroit during a news conference in Detroit, Michigan July 19, 2013. Credit: Reuters/ Rebecca Cook

DETROIT (WKZO) -- A judge is expected to rule Thursday on whether Detroit can pay two banks roughly 165-million dollars to terminate a troubled pension deal.

U.S. Bankruptcy Judge Steven Rhodes says he will announce his decision at 2 p.m. on Thursday.  The ruling will come following a trial that began last month and featured objections from bond issuers, pension funds, banks and several others.

At stake is a proposal to pay UBS AG and Bank of America 165-million dollars to end an interest rate swaps agreement tied to 1.4-billion dollars in money borrowed in 2005-2006 to prop up Detroit’s pension funds.  If Rhodes approves the move, Detroit will pay off the banks with a 285-million dollar loan.

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