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Detroit’s municipal debt attracting hedge fund ‘vultures’

Reuters – Hedge funds have found success in the last two decades in corporate bankruptcies, but now they have set their sights on struggling municipalities, “and no place beckons like Detroit,” according to a report in Reuters called “Analysis: Hedge funds in search of distress take a look at Detroit.”

With Detroit’s billions of dollars in long-term debt, Reuters notes that the city’s bankruptcy would be comparable to some of the largest corporate restructurings, should it go down that route. The size of Detroit’s debt means that the hedge funds could take large chunks of it at time – hundreds of millions of dollars – making it a more attractive investment.

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