Detroit recovery plan threatens underpinnings of muni market

Detroit recovery plan threatens underpinnings of muni market | Crain's Detroit Business:
"Orr proposed a deal last week that included skipping a $39.7 million payment on pension-obligation debt. 
The city is also set to default on unsecured unlimited-tax and limited-tax general-obligation bonds as it grapples with $17 billion in liabilities to avoid a record bankruptcy.
......It definitely sets a precedent, and there's definitely going to be a penalty going forward for the city and the state," said Dan Solender, director of munis at Lord Abbett & Co. in Jersey City, New Jersey.
The company oversees $19.5 billion of local debt.
Detroit, where officials struggle to provide public safety and even street lighting, joins California cities Stockton and San Bernardino in trying to stick bondholders with a loss.
With about 700,000 residents, it's the most-populous city in at least 35 years to default on debt."