Detroit will officially exit the biggest-ever U.S. municipal bankruptcy later on Wednesday, officials said, allowing Michigan's largest city to start a new chapter with a lighter debt load. The city, which filed for bankruptcy in July 2013 as years of population and revenue losses took a toll on its budget, will shed about $7 billion of its $18 billion of debt and obligations.
"We're going to start fresh tomorrow and do the best we can to deliver the kind of services people deserve," said Mayor Mike Duggan. Later on Wednesday, payments to city creditors will be triggered under a debt adjustment plan confirmed by a U.S. Bankruptcy Court judge last month. Most of the settlements with major creditors, including Detroit's pension funds and bondholders, will be paid with a distribution of about $720 million of bonds. The city will reissue $287 million of existing bonds and also borrow about $275 million from Barclays Capital to finance its exit from bankruptcy.