Lewis & Munday praised for work on City of Detroit interest rate swap termination payment

The Bond Buyer, in its April 15, 2009 edition, wrote the following with reference to Detroit Mayor Ken Cockrel Jr.'s 2010 proposed budget:

". . . Cockrel and Chief Financial Officer Joseph Harris urged the Council to approve an ordinance that would allow Detroit to avoid an interest rate swap termination payment that could total $400 million.

The agreement between the City and the two swap counterparties, UBS AG and SBS Financial Products Co., was announced last week after months of negotiations. The termination event, tied to swaps on $800 million of pension certificates of participation, stems in part from the downgrade of the City's debt into junk territory by all three rating agencies earlier this year.

Detroit's finance team expects to introduce the ordinance cementing the deal to Council within the next three weeks, according to Harris. 'It was a day of jubilation when the investors agreed to not require the City to pay $400 million,' he told the Council.

Warning that the termination payment would devastate the City's finances, he singled out for praise the public finance professionals who helped negotiate the final agreement. 'Our hats are off to Orrick, Herrington & Sutcliffe LLP and Lewis & Munday and our financial adviser Tom Gavin, for they really did an outstanding, outstanding job,' Harris said. 'We literally would have been bankrupt,' if forced to make the payment. . ."