A deal that may help the city speed the end of the biggest-ever U.S. municipal bankruptcy, which is threatening city pensions.

The swaps, tied to pension obligation bonds issued in 2005 and 2006, were designed to protect against rising interest rates by requiring the banks to pay the city if rates rose above a certain level.

The proposals were quickly dismissed by Detroits emergency manager, Kevyn Orr, who said any sale would not only kill a proposal to pump $816 million into the citys underfunded pension systems, it would also hurt residents.

The city will ask a judge to let it send the disclosure statement to creditors to solicit their votes on the debt-reduction plan. The plan calls for cutting public worker pensions and some bond payments.

Detroits emergency financial manager said the city may be able to conclude its record $18 billion bankruptcy in October, less than 18 months after seeking court protection from creditors.

Detroit won court approval to issue $120 million in bonds to pay for emergency vehicles and basic services while it prepares for a court battle with creditors over how to reduce $18 billion in debt.

Detroit will ask the judge to let it seek votes on a debt - reduction plan filed last month by emergency manager Kevyn Orr. That plan would reduce pensions to police officers, firefighters and other city employees.

Detroit Emergency Manager Kevyn Orr said time is running out for creditors to reach an agreement with the city on a plan to resolve the biggest U.S. municipal bankruptcy.