BRADENTON, Fla. - Using an analogy between "fish and chips" and derivatives transactions to frame his decision, a federal judge weighing the Alabama Public School and College Authority's bid to void a swaption has finally issued his first ruling nine months after the case was filed.

U.S. District Judge W. Keith Watkins last week denied JPMorgan's motion to dismiss the case that was brought last October by the authority. The APSCA sought a declaratory judgment as to whether a swaption it entered in 2002, and amended in 2003, was legal under Alabama law. A swaption gives the bank counterparty purchasing it the option to require a bond issuer to enter into a swap at a future date.

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