News and Information from Bond Buyer

The federal bankruptcy judge overseeing Detroit's Chapter 9 case heard arguments Wednesday from bond insurers challenging the city's effort to treat its unlimited-tax general obligation bonds as unsecured.

Government

The municipal bond market ended Wednesday stronger, helped by low supply and indications that the Federal Reserve will continue to slow its quantitative easing program at a measured pace.

After a nearly three-year battle, Honolulu rail officials prevailed over detractors of Oahu's $5.26 billion elevated-rail project with two federal court victories on Feb. 18.

Tax-exempt interest from public purpose state and local government bonds was estimated to be the fourth largest corporate tax expenditure in fiscal year 2013, according to a Congressional Research Service report that used data from the Joint Committee on Taxation.

The Port Authority of New York and New Jersey adopted a $27.6 billion capital plan focused on transportation projects.

Dealer groups are unsure whether the Municipal Securities Rulemaking Board's proposed best execution rule is tailored enough for the municipal market, but are pleased it would exempt sophisticated professionals.

Regional Transportation Authority of Illinois board chairman John Gates announced Wednesday he would step down from the post at the end of his term in June.

California Gov. Jerry Brown has signed into law a bill that would allow infrastructure finance districts to include previous redevelopment project areas.

Rhode Island's announcement of a potential settlement regarding lawsuits challenging a 2011 landmark pension overhaul law is a positive development, said Fitch Ratings.

The week's two largest deals being priced for retail weren't enough to get the municipal market rallying Wednesday, traders said.

The public district managing the $380 million renovation of the St. Louis Gateway Arch grounds is selling $56 million of sales tax appropriation bonds for the makeover project.

Federal Open Market Committee members continued to believe that if the economy continues to develop as anticipated, additional reductions in the pace of asset purchases would be made in "measured steps," according to the minutes of the panel's January meeting, released Wednesday.

New York City should settle its expired labor contracts by the end of the fiscal year or risk budget uncertainty and rating scrutiny, said Comptroller Scott Stringer.

Standard & Poor's Ratings Services said it lowered the rating on Lehigh County General Purpose Authority, Pa.'s series 2006 college revenue bonds, issued for Cedar Crest College, one notch to BB-plus from BBB-minus.

Moody's Investors Service on Feb. 18 upgraded Orange County, Calif. Sanitation District's certificates of participation to Aa1 from Aa2 affecting $392.1 million in debt.

PFM director David Eichenthal will discuss his new book, “The Art of the Watchdog,” at a meeting of the Philadelphia organization The Committee of Seventy.

Despite its decline as a result of labor for participation drops, the unemployment rate "remains as good an indicator of overall labor market health as it has been historically," Federal Reserve Bank of St. Louis President and CEO James Bullard said Wednesday.

The Federal Open Market Committee will continue to taper throughout the year, with asset purchases finished by the fourth quarter, Federal Reserve Bank of Atlanta President Dennis Lockhart said Wednesday.

The California Housing Finance Agency showed it's possible to buy time, and not just kick the can down the road, when faced with significant financial challenges, according to a Municipal Market Advisors report.