Finance

Stockton, Calif., Council Backs Plan to Get Out of Bankruptcy

Stockton, California's city council approved a plan on Thursday for the city to adjust its debt to exit from bankruptcy after reaching a deal with bond insurer Assured Guaranty to restructure more than $150 million of outstanding debt.
October 4, 2013

Stockton, California's city council approved a plan on Thursday for the city to adjust its debt to exit from bankruptcy after reaching a deal with bond insurer Assured Guaranty to restructure more than $150 million of outstanding debt.

The deal marks the end of a long and often bitter fight between Stockton and its biggest bond insurers since the city filed for bankruptcy last year and stunned the U.S. municipal debt market with threats of forcing losses on bondholders while leaving pension payments intact.

"Now we have deals with every bond insurer that's involved in the bankruptcy process," Stockton City Manager Bob Deis said, adding he is hopeful the city is on track to exit bankruptcy in about six months.

"We've got deals with almost everybody," Deis told Reuters, noting the city now has struck deals with all but three of its 19 major creditors.

Talks with the three will continue, Deis added.

Join the Discussion

After you comment, click Post. You can enter an anonymous Display Name or connect to a social profile.

More from Finance