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Detroit Muni Bonds to Pay Less than 10 Cents on the Dollar

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With Detroit on the brink of bankruptcy the latest workout has muni bondholders receiving less than 10 cents on the dollar. I don’t want you going near blue state muni bonds. Expect more haircuts like Detroit’s in other pension bloated cities across the country. The investing class will be an afterthought. As Matthew Dolan of The Wall Street Journal reports:

Detroit is proposing to pay unsecured lenders fewer than 10 cents on the dollar as part of a restructuring plan that would invest $1.25 billion in public safety and blight removal.

The city’s emergency manager, Kevyn Orr, said Detroit will stop making payments on billions of dollars in unsecured municipal debt starting Friday as part of a move to save cash. City employees and vendors will continue to be paid. If the debt nonpayment is viewed as a default, it could move the city a step closer to filing for Chapter 9 bankruptcy protection.

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E.J. Smith - Your Survival Guy

Preparing your investments and family for when disaster strikes.
E.J. Smith is the Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH, where he completed course-work in Practical and Defensive Handgun, Conceal Carry Pistol, Shotguns, Precision Scope Rifle and Kidnapping Prevention. E.J. plays a Yamaha Recording Custom drum set with Zilldjian cymbals. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@youngresearch.com. Sign up here to receive all the best content from Richardcyoung.com each week.