Bankruptcy

The public power sector remained relatively financially stable through fiscal 2008 despite the economic downturn, partly because utilities were able to restructure variable-rate and auction-rate debt, as well as unwind out-of-the-money swaps, Fitch Ratings will say in a report released today.

SAN FRANCISCO - The top finance official in Mammoth Lakes, Calif., says there is no chance the resort community will fail to redeem $2 million in notes at the end of the month, despite a Standard & Poor's ratings action casting doubt on its ability to do so.

WASHINGTON - The Securities and Exchange Commission has approved a request from the Municipal Securities Rulemaking Board that will allow its EMMA system to begin collecting issuers' voluntary filings of non-required financial or operating data as well as event-based disclosures on July 1, the same day the board launches the system's permanent continuing disclosure component.

WASHINGTON - The Municipal Securities Rulemaking Board reminded dealers yesterday that its Rule G-37 ban on political contributions applies to dealers soliciting business involving Build America Bonds, as well as other types of taxable tax-credit bonds.

WASHINGTON — DPC Data Inc., is urging the Securities and Exchange Commission to delay for six months the planned July 1 switch from four nationally repositories for issuers' secondary market muni bond disclosures to one run by the Municipal Securities Rulemaking Board called EMMA, warning that the transition is "a disaster waiting to happen."

WASHINGTON - The National Federation of Municipal Analysts is calling for municipal disclosure practices to be made more like corporate disclosures and is urging lawmakers to provide a federal regulator with the authority to directly oversee muni disclosures and market participants.

The derivatives industry supports clearinghouses and data repositories that would make over-the-counter markets more transparent, but fears any efforts to regulate beyond this would be duplicative and costly, the head of the International Swaps and Derivatives Association told lawmakers yesterday.

Issuers and industry officials yesterday said they are disconcerted about a "disconnect" between the high rates issuers are paying for variable-rate demand obligations that have become bank bonds, and the low rates banks are receiving on loans from the Federal Reserve after using the bonds for collateral.

The "new normal" in the municipal bond market isn't, well, normal.

WASHINGTON - Merchant Capital LLC has agreed to pay $55,000 to settle Securities and Exchange Commission charges that it violated muni bond rules by treating issuer officials, family members and friends to upscale restaurants and Broadway shows and then reimbursing itself with public money, including bond proceeds.

WASHINGTON - Rep. Jim Himes, a freshman Democrat from Connecticut who sits on the House Financial Services Committee, says he knows through first-hand experience why a short-term federal reinsurance program for municipal bonds is "urgently needed."Himes, who helped draft legislation that would authorize the creation of such a program, said that several municipal issuers in his district and across the country, especially lower rated municipalities and nonprofits, are delaying capital projects because they have been unable to secure credit enhancement on their bonds.

WASHINGTON — As it teeters on the brink of bankruptcy, Jefferson County, Ala., is taking the unprecedented step of asking the Securities and Exchange Commission to play a role in restructuring its $3.2 billion sewer debt portfolio.

WASHINGTON -The Village Center Community Developer District in Florida is not considering an Internal Revenue Service proposal to settle alleged tax-law violations over $64.26 million of 2003 recreational revenue bonds that financed the acquisition of golf courses and other facilities for its retirement community, the CDD's manager said yesterday.

Helen Elizabeth Garrett withdrew as President Obama's nominee for the post of Treasury assistant secretary for tax policy over the weekend, leaving tax experts to complain that the delay in filling the slot will hamper the administration's efforts to make changes in the federal tax code.

The Securities and Exchange Commission yesterday announced the appointment of George Canellos as director of its New York regional office, where he will oversee enforcement and examination operations.

WASHINGTON - The Securities and Exchange Commission plans to repropose rule changes next month that would impose pay-to-play restrictions on investment advisers for states and localities, modelled partly on limits already in place for municipal broker-dealers.

SAN FRANCISCO - California is in a dire fiscal position and lawmakers need to act quickly to fix it, Gov. Arnold Schwarzenegger said yesterday in an address to a joint session of the Legislature.

WASHINGTON - The Internal Revenue Service is urging two community development districts in central Florida to settle tax law violations relating to tax-exempt bonds issued for The Villages retirement community by redeeming $355.35 million of them, paying the federal government at least $2.85 million, and agreeing to refrain from issuing any more tax-free bonds.

The Municipal Securities Rulemaking Board yesterday took a big step toward becoming the all-electronic central repository for both primary and continuing disclosure documents with the launch of two crucial components of its EMMA site.

WASHINGTON - The National Association of Bond Lawyers is urging the Internal Revenue Service to focus most of its attention over the next 12 months on drafting rules for the American Recovery and Reinvestment Act's two-year bond provisions.