Bankruptcy

WASHINGTON - The amount of tax-exempt debt that went into default in 2008 spiked to record levels equaling about 2% of the year's total dollar amount of new issuance, and 2009 is on track for another high level of defaults, according to market participants who track them.

WASHINGTON - The Securities and Exchange Commission voted unanimously yesterday to propose sweeping changes to the way tax-exempt and other money market funds are regulated in response to the financial crisis and the unprecedented havoc caused by the run on a taxable fund last fall.

DALLAS - With the end of the fiscal year just five days away, Arizona's $8.2 billion budget remains in limbo after the state Supreme Court failed to end a standoff between Gov. Jan Brewer and legislative leaders.

A House Financial Services Committee hearing on the proposed creation of a consumer protection agency posed more questions than it answered about how the new regulator would function and how disputes would be resolved between it and existing regulators.

SAN FRANCISCO - Proposals from both the governor and the Legislature to close California's budget deficit include stripping the share of state fuel-tax revenue that currently goes to local governments.

WASHINGTON - Over-the-counter derivatives that are securities-based should be regulated under federal securities laws by the Securities and Exchange Commission, SEC chairman Mary Schapiro told a Senate panel yesterday.

SAN FRANCISCO - The deadline pressures for California's leaders to bring the state's general fund budget into balance were further emphasized Friday when Moody's Investors Service placed the state's A2 general obligation bond rating on watch list for possible downgrade.

SAN FRANCISCO - The California Supreme Court last week declined to hear the appeal of a case that challenged the state's ability to issue lease revenue bonds.

WASHINGTON - The Municipal Securities Rulemaking Board today will release and seek public comments on draft changes to its Rule G-37 on political contributions that would require dealers to disclose contributions they make to campaign committees pushing bond ballot initiatives.

CHICAGO - Illinois has launched a request for proposals process for law firms, financial advisers and underwriters interested in working on a surge of debt issuance planned in the coming two years if lawmakers can break an impasse over how to balance the state's operating budget.

BRADENTON, Fla.— In a two-page ruling Friday afternoon, Miami-Dade County Circuit Court Judge Lawrence Schwartz denied a request by two local residents for an emergency injunction to stop the county from selling bonds to finance a new stadium for the Florida Marlins.

BRADENTON, Fla. - After hearing from more than a dozen professionals and local elected officials about the future use of variable-rate debt and derivatives in Tennessee, the state's comptroller has decided to take comments from the public before finalizing recommendations to the State Funding Board.

WASHINGTON - The sweeping financial regulatory reform plan that the Obama administration unveiled yesterday calls for expanding the authority of the Securities and Exchange Commission to promote transparency in disclosures to investors, which some market participants said appears to be in line with the SEC's plans to bolster its oversight of municipal securities.

WASHINGTON - The chairman of a House subcommittee said yesterday that he plans to push pending legislation that would give the federal government a greater role in examining insurance companies and their holding companies, while an insurance industry official urged lawmakers to mandate federal regulations for bond insurers.

BRADENTON, Fla. - In a long-awaited ruling late Friday, federal Judge David Proctor said that Jefferson County's sewer bond trustee and two insurers of the troubled sewer debt "are entitled to prevail on the facts" but he could not appoint the receiver they sought for the sewer system because the law favored the Alabama county.

WASHINGTON - The Financial Industry Regulatory Authority fined seven firms a total of $184,500, including $80,000 for Tulsa-based BOSC Inc., for failing to timely or accurately report municipal securities, unfairly pricing bonds, as well as other muni and non-muni rule violations.

WASHINGTON — The financial markets regulatory reform plan that the Obama administration is to propose Wednesday does not include changes to the structure or jurisdiction of the Securities and Exchange Commission, or to self-regulatory organizations that operate under it such as the Municipal Securities Rulemaking Board, a senior administration official said in a background briefing with reporters Tuesday night.

As climate change legislation makes its way through the House and the country's job losses continue, the credit profiles of many investment-grade utilities could suffer despite their usual strength in the face of financial strife, Standard & Poor's said.

WASHINGTON - The Regional Bond Dealers Association has launched an attack on what it calls the CUSIP Service Bureau's "aggressive campaign to extract licensing fees" from muni market participants, claiming the bureau is trying to "prohibit, restrict and exploit" the use of Cusips, which are purchased by issuers and required by the market.

The American Bar Association's committee on tax-exempt financing has requested priority guidance on municipal bonds from the Internal Revenue Service, including a definition for issue price and responses to questions about Build America Bonds and qualified school construction bonds.