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RPT-Detroit creditors brace for haircuts, or worse, at meeting to avoid bankruptcy

Detroit's creditors will begin to learn on Friday morning what they can recover without driving the financially troubled city into bankruptcy when the city's emergency manager unveils his restructuring plan. Manager Kevyn Orr has dropped hints that creditors would fare better by compromising now rather than in court should he opt to file what would be the biggest municipal bankruptcy in U.S. history. He has begun laying a choice before creditors: Work with him by accepting cuts to what they are owed, or face the prospect of a Chapter 9 bankruptcy proceeding where they might have little influence on the outcome.   "I have a very powerful statute," Orr said at his first meeting with the public on Monday, referring to Michigan's new emergency manager law. "I have an even more powerful Chapter 9. I don't want to use it, but I am going to accomplish this job. That will happen." Orr, the bankruptcy attorney Michigan officials tapped in March to run th

Detroit to stop making some debt payments, emergency manager says

Detroit's emergency manager on Friday called for "shared sacrifice" among all the city's creditors and said payments on certain outstanding bonds would stop immediately. _0"> Kevyn Orr proposed that creditors, including bondholders and pension funds, give up some of the $17 billion they are owed by Detroit to help the insolvent city avoid filing what would be the biggest municipal bankruptcy in history.   The moratorium on principal and interest payments on the city's unsecured debt, including a $34 million payment on pension certificates of participation due on Friday, would allow the city to conserve cash needed to provide services to residents, Orr said. Unsecured creditors, including bondholders and pension funds, will receive a pro rata share of $2 billion of notes the city would issue and pay off as its financial circumstances improve. City workers and retirees would also face changes to their pensions and health care coverage "consistent

Detroit in default if pension certificate payments not made-Fitch

Credit rating agency Fitch said it would consider Detroit to be in default if it stops making payments on certain obligations as indicated Friday by the city's emergency manager. _0"> Emergency manager Kevyn Orr told city creditors at a meeting on Friday that Detroit would stop making payments on some debt, including a $34 million payment on pension certificates of participation due on Friday. "If the payment doesn't get made, we would downgrade the rating from the current level of 'CC' to 'D,' for default," said Arlene Bohner, Fitch's director and manager of the Midwest/Great Lakes Tax Supported Group.  

Detroit's Orr, after meeting creditors, says bankruptcy still possible

Detroit Emergency Manager Kevyn Orr said he still sees a 50/50 chance the city will have to file the largest municipal bankruptcy in U.S. history. _0"> Orr spoke after he met with holders of some $17 billion in Detroit debt and called on them to accept a substantial cut in the money they are owed. He also announced at the meeting a moratorium on some debt service payments, which Fitch Ratings said amounted to a default on those bonds.

S&P cuts Detroit bond ratings on expected default

Standard & Poor's Ratings Services dropped Detroit's credit ratings to CC from CCC-negative on Friday, citing the city's expected default on outstanding pension debt. _0"> Kevyn Orr, the city's emergency manager, released a restructuring plan that calls for a halt to debt service payments on unsecured debt, starting with a $34 million payment due Friday. "Standard & Poor's rates an issue CC when we expect default to be a virtual certainty, regardless of the time to default," the credit rating agency said in a statement.   S&P, which just downgraded Detroit's ratings on Wednesday, also kept a negative outlook on the CC rating for the city's general obligation and pension debt due to the potential of a Chapter 9 municipal bankruptcy filing.

Montenegro eyes bankruptcy for stricken aluminium plant

The Montenegrin government filed a court motion on Friday to consider bankruptcy for the country's single biggest industrial employer, indebted aluminium plant KAP, which faces having its electricity cut off over unpaid bills. _0"> Kombinat Aluminijuma Podgorica employs 1,200 people and accounted for 4.7 percent of the tiny Adriatic republic's economic output last year. But the debt of the company, which is jointly owned by the state and the Central European Aluminium Company of Russian billionaire Oleg Deripaska, amounts to some 350 million euros ($467 million), equivalent to one tenth of gross domestic product (GDP). It soaks up 3 million euros of state subsidies every month and lost 16.2 million euros in the first quarter of the year. The motion, initiated by the finance ministry, foresees bankruptcy management taking control of KAP cash flow, assets and liabilities until the court rules on July 16 whether to declare the company bankrupt, said court-appointed

UPDATE 4-Detroit to stop paying some debt, putting it in default

Detroit said on Friday it would stop making payments on some of its about $18.5 billion debt, which would put it in default, and the "insolvent" city called on most of its creditors to accept pennies on the dollar to help it avoid the largest municipal bankruptcy filing in U.S. history. In a forceful opening salvo of negotiations with debt holders, Detroit Emergency Manager Kevyn Orr announced a moratorium on some principal and interest payments, including one payment he said was due on Friday.   Under his proposal, Orr said unsecured debt holders would be paid less than 10 cents on the dollar, but some creditors would get a bit more based on city revenue. Some $11.5 billion of the debt is unsecured and $7 billion secured, according to figures presented by Orr. Orr said secured creditors would get better treatment, although how much better was not specified. "We may try to get a discount from them, but the reality is they are secured," Orr said. Secured credit

After opening gambit, Detroit manager's next move vexes creditors

Now that Detroit's emergency manager has laid out a tough road that could include a bankruptcy filing for the city, the bondholders, pension managers and others with a stake in the outcome are left to assess his next steps while seeking to minimize any possible losses. Kevyn Orr faces a difficult task, for he must either coerce the financially troubled city's creditors into cutting a deal that would leave many with just pennies on the dollar, or file for Chapter 9 bankruptcy, where his powers would be greater but the likelihood of long, costly litigation far higher.   Rather than a corporate setting, the city's emergency manager is acting in a political realm where the interests of Detroit's citizens and even credit ratings throughout the state of Michigan may hang in the balance. There was a forceful start to negotiations with debtholders at a Detroit hotel on Friday, with the city represented by Orr saying it would stop making payments on some of its $18.5 billio

U.S. puts jets in Jordan, fuels Russian fear of Syria no-fly zone

The United States said on Saturday it would keep F-16 fighters and Patriot missiles in Jordan at Amman's request, and Russia bristled at the possibility they could be used to enforce a no-fly zone inside Syria. Washington, which has long called for President Bashar al-Assad to step down, pledged military support to Syrian rebels this week, citing what it said was the Syrian military's use of chemical weapons - an allegation Damascus has denied.   Defense Secretary Chuck Hagel has approved a Jordanian request for American F-16s and Patriot missiles to remain in the Western-backed kingdom after a joint military exercise there next week, a Pentagon spokesman said. Western diplomats said on Friday Washington was considering a limited no-fly zone over parts of Syria , but the White House noted later that it would be far harder and costlier to set one up there than it was in Libya, saying the United States had no national interest in pursuing that option. Russia, an ally of Da

Turkish riot police storm Istanbul park in bid to end protests

Turkish riot police stormed an Istanbul park at the heart of two weeks of protest against Prime Minister Tayyip Erdogan on Saturday, firing tear gas and water cannon and sending hundreds scurrying into surrounding streets. Lines of police backed by armored vehicles sealed off Taksim Square in the center of the city as officers stormed the adjoining Gezi Park, where protesters had been living in a ramshackle tent camp.   Erdogan had warned hours earlier that security forces would clear the square, the center of more than two weeks of fierce anti-government protests that spread to cities across Turkey , unless the demonstrators withdrew before a ruling party rally in Istanbul on Sunday. "We have our Istanbul rally tomorrow. I say it clearly: Taksim Square must be evacuated, otherwise this country's security forces know how to evacuate it," he told tens of thousands of flag-waving supporters at a rally in Ankara. A main public-sector union confederation, KESK, which ha

Iran's new president hails 'victory of moderation'

Moderate cleric Hassan Rohani won Iran's presidential election on Saturday with a resounding defeat of conservative hardliners, calling it a victory of moderation over extremism and pledging a new tone of respect in international affairs. Though thousands of jubilant Iranians poured onto the streets in celebration of the victory, the outcome will not soon transform Iran's tense relations with the West, resolve the row over its nuclear program or lessen its support of Syria's president in the civil war there - matters of national security that remain the domain of Supreme Leader Ayatollah Ali Khamenei.   But the president runs the economy and wields broad influence in decision-making in other spheres. Rohani's resounding mandate could provide latitude for a diplomatic thaw with the West and more social freedoms at home after eight years of belligerence and repression under President Mahmoud Ahmadinejad, who was legally barred from seeking a third consecutive term. &

Power outages hit Mexico City after quake in country's center

Power outages hit the Mexican capital of Mexico City on Sunday after an earthquake struck the center of the country, and officials said there was no other damage reported. _0"> Some restaurants and residential buildings in the capital were evacuated as a precautionary measure, they said. Buildings shuddered in the city, a Reuters witness said. The U.S. Geological Survey (USGS) downgraded its initial measurement of the quake to magnitude 5.8 from 6.0. No one at state oil company Pemex was immediately available to comment but the group has no major installations near the epicenter of the quake, 14 miles west of Jolalpan in southwest Mexico, 76 miles south of Mexico City. (Reporting by Simon Gardner; Editing by Louise Ireland and Robert Birsel)  

Hong Kong rally backs Snowden, denounces allegations of U.S. spying

A few hundred rights advocates and political activists marched through Hong Kong on Saturday to demand protection for Edward Snowden, who leaked revelations of U.S. electronic surveillance and is now believed to be holed up in the former British colony. Marchers gathered outside the U.S. consulate shouting slogans denouncing alleged spying operations aimed at China and Hong Kong, but the numbers were modest compared to rallies over other rights and political issues.   "Arrest Obama, free Snowden," protesters shouted outside the slate grey building as police looked on. Many waved banners that said: "Betray Snowden, betray freedom", "Big brother is watching you" and "Obama is checking your email". In his first comments on Snowden's case, Hong Kong leader Leung Chun-ying said late on Saturday that the government would handle it in accordance with established laws. "When the relevant mechanism is activated, the Hong Kong SAR Governmen

Merkel challenger cracks whip after party chairman's criticism

Peer Steinbrueck, the main opposition challenger to German Chancellor Angela Merkel, choked up during an interview on Sunday when he was asked about what motivated him to carry on despite all the pressure and criticism of his campaign. In an extraordinary display of emotion from a man known for his abrasive style, Steinbrueck struggled to find words, and sighed heavily. As his eyes welled up, the audience at the event by his Social Democrat (SPD) party stood up and applauded.   Steinbrueck, who is badly lagging Merkel in the run-up to the September 22 election, faced more controversy on Sunday after rebuking his party's chairman for his disloyalty - yet another sign of disarray in his campaign. He gave an interview with his wife Gertrude at the party event in which she spoke about how their lives had totally changed since her husband became lead challenger, and said he would never have taken this on, were it not for his convictions. "We were doing well ... we had freedom

Kuwait court dissolves parliament, orders new elections

Kuwait's top court ordered the dissolution of parliament on Sunday and called for fresh elections, a ruling likely to herald fresh political volatility in the U.S.-allied Gulf Arab state. The Constitutional Court made its ruling after throwing out opposition challenges to changes to the electoral system decreed by the emir, hereditary ruler of the oil-exporting country, head judge Youssef al-Mutawa told reporters. Political stability in Kuwait, owner of more than six percent of global oil reserves, has traditionally depended on cooperation between the government and parliament, the oldest and most powerful legislature in the Gulf Arab states. The development is a blow to opposition politicians who boycotted a parliamentary election in December in protest at the electoral rules. The election was the fifth since 2006 and political upheaval has held up economic development and reforms.   "This verdict today is the worst decision," former opposition MP Waleed Tabtabie w

Czech coalition could go on without PM Necas: partner

The Czech Republic's deputy premier said on Sunday some in the governing coalition are considering the option of ditching Prime Minister Petr Necas after one of his closest aides was charged with bribery and ordering illegal surveillance. _0"> Necas has been under pressure to resign since the biggest police operation against corruption in two decades led to the detention of his long-standing aide Jana Nagyova along with five other suspects. Two partners in Necas's centre-right coalition, which has a wobbly majority in parliament, have been increasingly uneasy about staying in government with Necas, who has insisted he has done nothing wrong and will not quit. Asked on Czech television if the coalition could continue until a regular election next year under a different prime minister, Deputy Prime Minister Karolina Peake said: "It is one of the options."   The three coalition party leaders were due to meet at 9 p.m. (1900 GMT) Sunday to discuss the fate o

Mandela getting better but remains 'serious'

Nelson Mandela continues to recover in hospital from a lung infection but remains in a serious condition, South African President Jacob Zuma said on Sunday. _0"> Mandela has been in a Pretoria hospital for a week, the fourth time the 94-year-old former president and anti-Apartheid leader has been admitted to hospital since December.   "We are grateful that he continues to get better," Zuma said. "Over the last two days, although he remains serious, his doctors have stated that his improvement has been sustained." Zuma was addressing a gathering for Youth Day in eMadadeni in the KwaZulu-Natal province in remembrance of the 1976 Soweto youth uprisings against apartheid. Mandela's repeated bouts of illness have reinforced a creeping realization among South Africa's 53 million people that they will one day have to say goodbye to their first black president. Mandela, popularly known by his clan name "Madiba", has a history of lung problem

India's main opposition alliance splits ahead of election

A powerful Indian regional party pulled out of the main opposition alliance on Sunday, a split that could hobble the rise of a controversial Hindu nationalist leader who hopes to oust the ruling Congress party in elections due by May 2014. The Janata Dal (United) party, based in the eastern state of Bihar, announced it would end a 17-year-old alliance with the Bharatiya Janata Party (BJP) after the BJP promoted firebrand leader Narendra Modi to lead its election campaign.   The exit could hamper the chances of the Hindu nationalist BJP finding enough allies to mount a convincing challenge to Prime Minister Manmohan Singh's administration, whose second term has been plagued by scandals and a worsening economy. It could also encourage a rag-tag of regional parties - with fickle leaders and diverse local agendas - to form their own so-called third front coalition, which, if they were successful, could present a risk for Asia's third-largest economy. Nitish Kumar, the chief m

Zimbabwe's Mugabe says rivals scared of 'sure' defeat

President Robert Mugabe accused political rivals of seeking to delay elections in Zimbabwe because they fear defeat, after regional leaders urged his ruling coalition to ask the courts to extend a July 31 deadline for holding the vote. His rivals said reforms to restrictive media and security laws were essential for any fair election to be held and that it was Mugabe's party that was not ready to go the polls.   Mugabe, Africa's oldest leader at 89, last week used a presidential decree to bypass parliament and fast-track changes to election laws and declare the voting date, drawing a sharp rebuke from Prime Minister Morgan Tsvangirai. In a clear sign that Mugabe's ZANU-PF party would not give ground on reforms, Justice Minister Patrick Chinamasa denied any need for either media or security reforms demanded by the MDC party of Tsvangirai, the president's arch-rival. Tsvangirai has previously said Mugabe should approach the courts to extend the election deadline. Mu

Swiss president would back criminal probe against NSA leaker

Swiss President Ueli Maurer said on Sunday he doubted Edward Snowden's claims about his activities as a CIA man in Geneva and would back a criminal investigation into the secrets leaker if Swiss prosecutors called for one. _0"> Ex-CIA operative Snowden broke cover in spectacular fashion earlier this month, unmasking himself as the source of leaks about U.S. government surveillance programs.   He had previously worked in the U.S. mission to the United Nations in Geneva between 2007 and 2009. He told the Guardian newspaper that he had a "formative" experience in the Swiss city when the CIA deliberately got a Swiss banker drunk and encouraged him to drive home. When he was arrested, a CIA operative offered to intervene and later recruited the banker. "It does not seem to me that it is likely that this incident played out as it has been described by Snowden and by the media," Maurer was quoted as saying in the Der Sonntag and SonntagsBlick newspapers.

France condemns attack on Chinese wine students

France's interior minister has condemned as racist an assault on six Chinese students by drunken locals in the Bordeaux wine-producing region that left one seriously injured. _0"> The attack comes amid reports that wealthy Chinese tourists are being increasingly targeted by muggers in Paris. It will do little to ease tensions between France and China , locked in a trade dispute ranging from solar panels to wine.   The assault in the village of Hostens, 50 km (30 miles) south of Bordeaux late on Friday came after one of the Chinese, who have been living in France for two months to study wine-making, complained about the noise a group of locals were making in the street. One student in her twenties was rushed to hospital in Bordeaux after being struck in the face with a bottle when the locals tried to break into the students' house, local newspaper Sud Ouest reported. Two suspects have been arrested. Interior Minister Manuel Valls' office issued a statement say

North Korea wants to hold high-level talks with U.S.

North Korea on Sunday offered high-level talks with the United States to ease tensions on the Korean peninsula, but the White House said that any talks must involve Pyongyang taking action to show it is moving toward scrapping its nuclear weapons. The offer came only days after North Korea abruptly canceled planned official talks with South Korea , the first planned talks in more two years. The North blamed the South for scuttling discussions that sought to mend estranged ties between the rival Koreas.   The North Korea National Defence Commission in a statement carried by KCNA news agency on Sunday said Washington can pick a date and place for talks and the two sides can discuss a range of issues, but no preconditions should be attached. "In order to ease tensions on the Korean peninsula and to achieve regional peace and safety, we propose to hold high-level talks between the DPRK and the United States," said the spokesman for the North's National Defence Commissio

Iranians count on president-elect Rohani to bring change

Iranian president-elect Hassan Rohani, who won a landslide victory promising better relations abroad and more freedom at home, on Sunday paid his first visit since the vote to Supreme Leader Ayatollah Ali Khamenei, who will ultimately decide the pace of any change. Rohani, a mid-ranking Shi'ite cleric, is an Islamic Republic insider who has held senior political and military posts since the 1979 Islamic revolution and maintained a good rapport with Khamenei, Iran's most powerful man.   Iranian media reported that Khamenei congratulated Rohani, wished him success, and gave him "the necessary guidance". Rohani's trouncing of his hardline rivals, who miscalculated the public mood and failed to overcome factional differences and field a single candidate, received a cautious welcome in Washington, although Israel warned against "wishful thinking" about Iran's future direction. While no reformer himself, Rohani gained the backing of the politically s