Harvey, Illinois, gets a roughly two-year window to restructure debt under a court-approved consent decree with a group of bondholders that allows the city to keep 90% of pledged tax revenues. A direct placement with a high-yield buyer provides the best route for the city, said Brian Battle, director of trading at Chicago-based Performance Trust Capital Partners. "It's going to be hard for Harvey because they have a long history of questionable management and corruption, a lack of accounting and some misdeeds," Battle said. "They have to establish that there is a plan that will fix the problems and that they can prove they can do that. They are going to be a penalty rate unless they use a lockbox where they have legal opinions."
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