PHILADELPHIA INQUIRER: The insistence by [Gov. Tom] Corbett and his backers among the state’s law and finance establishment that cash-strapped Harrisburg not seek federal bankruptcy reorganization, and the slow, steady drafting of a restructuring plan that the city’s creditors say they can live with, has made him the bond guys’ favorite alternative to woebegone Detroit, whose Chapter 9 filing has shaken the bond markets, boosted municipal borrowing costs, cut bond valuations, and driven investors to dump bond funds…
At first glance, the Harrisburg reorganization plan posted by state-appointed receiver William Lynch looks tough on lenders: It leaves Dauphin County, which helped guarantee Harrisburg’s foolish borrowing, and its insurer, Assured Guaranty, to collect only about $210 million of the $300 million Harrisburg owes them, notes Tom Kozlik, boss muni bond analyst at Janney Capital Markets in Philadelphia…
Over time, though, the county and insurers “will potentially receive further payment from future parking operations” and other sources baked into Lynch’s “Harrisburg Strong Plan,” pending final approval by Commonwealth Court, Kozlik says… (more)
