2009 Non - Traditional Financing Deal of the Year Award by The Bond Buyer for City of Detroit Swap R

In a year which saw state and local governments paying large termination payments due to the credit crisis, the City of Detroit (the City) is unique. Confronted with a termination event, the City, instead, restructured the interest rate swaps. In doing so it reduced its financial exposure from an initial $400 million termination payment to an annual 0.80% increase in the fixed rate it pays.

Payment of a termination payment of any magnitude was not within the financial capabilities of the City. Bankruptcy was not a practical option under Michigan law, and failure to negotiate a financially feasible solution risked the possibility of litigation that could consume scarce financial resources. An adverse result could have imposed a crushing financial burden on the City's taxpayers.

The City's financial situation was deteriorating, and its rating just had been lowered to below investment grade. Adding to this complexity of the City's financial situation was the need to quickly reach resolution in order to access the capital market for the City's cash flow needs. If a solution were to be found, it had to lie within the City's financial capabilities and existing legal structure, and it had to be found quickly.

Lewis & Munday, P.C. had a lead role in finding that solution and had primary responsibility for the legal aspects of the transaction. The transaction was awarded the 2009 Non-Traditional Financing Deal of the Year by The Bond Buyer.