Fearing a national precedent may be set that could affect billions of dollars of municipal debt across the country, the National Federation of Municipal Analysts has filed a brief in Vallejo, Calif.’s bankruptcy case.

The NFMA said Tuesday it submitted an amicus curiae brief with the U.S. Bankruptcy Court for the Eastern District of California in favor of a motion by bond insurer National Public Finance Guarantee Corp. asking the court to allow a state credit-enhancement program to divert funds to pay owners of certificates of participation issued by Vallejo.

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