Cate Long On The Next Big Question In Detroit Bankruptcy
Cate Long is the founder of Puerto Rico Clearinghouse, an independent research and analysis platform for bondholders.
Long is also also a financial blogger, and she recently joined Benzinga’s #PreMarket Prep to talk about the next big question in Detroit’s bankruptcy.
Overall, Long said she thinks that Emergency Manager Kevin Orr and his team have done a pretty good job of getting all of the creditors agreements. The only remaining bond insurer that has not come to an agreement is Financial Guaranty Insurance Co.
"I think the big question in terms of Detroit and the bond markets is them being able to put together this exit financing," she said.
Exit financing is part of closing a bankruptcy, Long explained, where the bankrupt entity gets cash to pay off its creditors and start making investments in terms of improvements to the city.
Detroit is looking for $300 million in exit financing, Long said, and the city's debt restructuring adviser says it can borrow at about 5.5 percent for short-term money. She explained that this indicates that the bond market still considers Detroit a very risky credit.
"But overall, I think it’s tremendous for the citizens of Detroit," she said. "It's a huge opportunity to remake the city."
Check out her full interview here:
Don’t forget to tune in to Benzinga’s #PreMarket Prep Monday-Friday 8-9:45 a.m. ET to get 300 commission-free trades from Charles Schwab.
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.