Detroit and its last major holdout creditor are hashing out a settlement that would be a major step ahead for the city as it fights to defend its bankruptcy exit plan in federal court.

A deal is close but the city and Financial Guaranty Insurance Co. are working out terms of the agreement, a person familiar with the matter confirmed late Monday.

Details of the potential settlement were scarce Monday but likely involve giving Financial Guaranty Insurance Co., a bond insurer with a $1.1-billion claim against the city, a share of bonds Detroit plans to issue to settle debts with creditors, and potentially city real estate or other assets in downtown Detroit. The settlement would mirror one the city made with Syncora Guaranty, which had been Detroit’s staunchest opponent in bankruptcy before settling.

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