City of Detroit Secures $275 Million Chapter 9 Exit Financing Bond Facility Commitment from Barclays Capital

DETROIT, Aug. 28, 2014 /PRNewswire/ -- Kevyn Orr, the Emergency Manager for the City of Detroit ("Detroit" or the "City"), announced today that the City has secured a $275 million Chapter 9 Exit Financing Bond Facility commitment ("Exit Facility") from Barclays Capital Inc. ("Barclays").  This financing commitment is the culmination of a robust process that included expressions of interest from a number of prospective lenders, underscoring the City's viability as an attractive investment. 

The City's Plan of Adjustment (the "Plan") filed with United States Bankruptcy Court for the Eastern District of Michigan contemplates that, as part of the implementation process, the City will obtain exit financing through the issuance of financial recovery bonds upon its emergence from bankruptcy protection.  The bonds will be issued by the Michigan Finance Authority.

The City expects that the net proceeds of the Exit Facility will be used to fund:

• The retirement of the City's $120 million post-petition financing facility;
• Certain of the City's reinvestment and revitalization initiatives; and
• The City's obligations with respect to certain classes of claims under the Plan of Adjustment.

It is expected that up to $200 million of the Exit Facility will be tax-exempt.

"Detroit continues to make steady progress in returning to firm financial footing and becoming an attractive place to invest once again," said Mr. Orr.  "We are very pleased to have secured this Exit Facility and are encouraged by the reception we received from the broader financial community.  We look forward to deploying these funds in our ongoing effort to make Detroit a viable and strong American city once again."

"The hard work accomplished during Detroit's restructuring has been clearly recognized by the capital markets," said Kenneth A. Buckfire, President and Managing Director of Miller Buckfire & Co.  "Detroit has a promising future and these funds will play an important role in achieving a number of the City's financial and operational goals."

Additional information on the commitment from Barclays can be found at www.detroitmi.gov/emergencymanager.

Miller Buckfire & Co., Jones Day, Miller Canfield, Ernst & Young and Conway MacKenzie Inc. are advising the City of Detroit on its restructuring.  Barclays will act as the exclusive underwriter and syndication agent for the Exit Facility.

SOURCE City of Detroit