Detroit secures $350M loan to help pay off debt

Detroit secures $350M loan to help pay off debt

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(WJBK) -

DETROIT (AP) - Detroit's state-appointed emergency manager says a $350 million loan has been secured to help the city pay its way out of a complicated deal involving major creditors. The city says the new loan allows them to pay off other debts that carry a higher interest rate.

Kevyn Orr said Friday that the money committed by Barclays will help with Detroit's reconstruction as he tries to take the city into the largest municipal bankruptcy in U.S. history.

A spokesperson for Orr, Bill Nowling, says the investment shows creditors are still willing to invest in Detroit, but that we are still on the road to financial recovery. "Everything that we're dealing with in the city is 60 years in the making. You're not going to fix it all in six months. People have to be patient a little bit about that. We understand they want to see services turned around right away, but it takes time. We have to restructure government. Government has to be able to function properly so they can fix those services," Nowling tells Fox 2.

About $230 million would be used to pay off some obligations related to its pension debt. The rest would be used to improve basic city services and technology infrastructure.

The city says the loan is secured with pledges of casino and income tax revenue, and cash from the potential value of assets that exceed $10 million.

The loan still has to be approved by a bankruptcy court judge.

 

The Associated Press contributed to this report.

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