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City of Detroit Healthcare Trust (VEBAs) Close on Financing

Posted on: Thursday, July 02, 2015

The City of Detroit Police and Fire Retiree Healthcare Trust and the General Retiree Healthcare Trust (the “VEBAs”) have closed on their financing with Citibank to provide two-year, short-term financing. The short-term financing will allow the VEBAs to continue to pay current retiree healthcare benefits.

Citibank will provide a $50 million loan secured by the VEBAs' City of Detroit Series B Notes, received pursuant to the City of Detroit’s bankruptcy Plan of Adjustment. Since the current market value of the Series B Notes are notably discounted by the market, Citibank’s loan provides the VEBAs with the flexibility to pay current retiree healthcare benefits over the next two-plus years without having to liquidate the Series B Notes.

Citibank’s loan will allow us to continue to pay timely retiree healthcare benefits over the next few years, while providing timing flexibility to monetize the B Notes.