BRADENTON, Fla. - A federal judge has stayed all proceedings in New Orleans' case against its pension bond insurer and remarketing agent because the parties mutually agreed to work on a settlement.

New Orleans on July 17 sued Ambac Assurance Corp. and UBS Securities LLC, claiming the two breached their contracts regarding the city's $171 million of taxable firefighter's pension bonds sold in 2000 as variable-rate demand obligations. The bonds are outstanding in the amount of $139.7 million and are now held by liquidity banks because of failed remarketings.

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