Syncora Guarantee Finalizes Detroit Tunnel Deal
Following a long dispute that involved unlikely parties, financial difficulties, and an uproar in cities in two different countries, Bermuda-based Syncora Guarantee Inc. has officially been cleared to take over operations of the American side of the Windsor-Detroit tunnel, a major thoroughfare for vehicles traveling between Canada and the United States.
Most importantly for those who make use of the tunnel, Syncora has assured drivers that they will not see any increase in tolls with the change in ownership.
The decision to transfer ownership comes following a drawn out battle between Syncora and investors in American Roads, the now bankrupt firm that previously owned and operated the U.S. side of the tunnel. Nearly $1 billion in debt, American Roads filed for bankruptcy and attempted to quickly sell its stake in the thoroughfare, only to have a group of investors in the company immediately take legal action to stop all efforts to reorganize the firm and its holdings.
Syncora lead the pack of potential operators from the beginning given their association with the tunnel; the Bermuda company had previously backed $500 million in bonds in 2006 in order to allow American Roads to take control of that asset, as well as several toll roads in Alabama. Under this new deal, they will forgive $334 million of that debt in exchange for full control of the company.
Officially, the city of Detroit still owns the U.S. side of the tunnel, with a lease deal in place that will give Syncora control until 2020; the Canadian side of the tunnel is owned by the city of Windsor, with operations overseen by a newly formed corporation in that city. That corporation has expressed interest in purchasing the American side of the tunnel if the city of Detroit decides to divest its ownership in the roadway at any time in the future.
