Bankruptcy

WASHINGTON - Municipal issuers continued to be plagued by downward credit pressure in the first quarter of 2009 as downgrades began to eclipse upgrades in major muni sectors, which face negative outlooks going forwards, Moody's Investors Service said in a report issued yesterday.

CHICAGO - While some Cook County, Ill., commissioners are worried that a political scandal over the sudden departure of the county's chief financial officer could affect its bond rating, credit analysts say that's unlikely and are more concerned about the potential impact of a proposed cutback in the unpopular sales tax hike pushed through last year.

WASHINGTON - The Municipal Securities Rulemaking Board issued guidance Friday reminding dealers that its rules apply to Build America Bonds authorized in the $787 billion stimulus package, even though BABs are taxable and may be sold through dealers' corporate bond desks.

SAN FRANCISCO - Having suffered two court defeats already, backers of a Las Vegas ballot measure that would upend Nevada redevelopment and lease-revenue bond laws have filed a last-ditch appeal to the state Supreme Court.

President Obama on Friday ratcheted up his push to eliminate the Federal Family Education Loan program, saying he's prepared to fight "wasteful subsidies" to student lenders..

WASHINGTON - House Financial Services Committee chairman Barney Frank is "reassessing" and may drop the inclusion of federal guarantees for general obligation debt that he originally planned to include in an omnibus municipal securities bill his staff is drafting, congressional sources familiar with the matter said.

DALLAS - Louisiana's current budget problems will be dwarfed by future deficits unless the state takes action now to prepare for lower revenues later, Gov. Bobby Jindal said Monday.

A Securities and Exchange Commission official yesterday said that staff are developing an "action plan" to boost municipal disclosure and accounting standards through new rulemaking or legislation.

BRADENTON, Fla. - Current debt management practices in Palm Beach County, Fla., have cost taxpayers as much as $5.38 million in extra interest and other expenses because of the way underwriters have been selected, the use of negotiation to sell bonds, and the purchasing of unnecessary bond insurance, according to Sharon Bock, the county's elected clerk and comptroller.

BRADENTON, Fla. - Jefferson County, Ala., commissioners today will vote on resolutions to authorize new payment extensions for troubled sewer debt and extension of forbearance agreements on payments for related swaps on which the county owes $748 million in termination payments.

SAN FRANCISCO - Under recently proposed legislation, California lawmakers may make it more difficult for municipalities to declare bankruptcy like Vallejo did last year.

WASHINGTON - The National Association of Bond Lawyers has finished a draft of the most comprehensive municipal bond disclosure guidance for attorneys and other market participants in more than 15 years, and is asking various market participants for comments before finalizing it.

The Municipal Securities Rulemaking Board announced yesterday that it will hold a joint seminar with the Regional Bond Dealers Association on May 13 in Memphis to review the MSRB's latest rules and recent initiatives.

CHICAGO - Cook County, Ill., Board President Todd H. Stroger named his chief of staff, Joseph Fratto, to serve as interim chief financial officer after the surprise resignation of Donna Dunnings from the post Friday over her ties to a fired county employee.

City National Securities has agreed to pay $315,000 and to submit a plan to buy back at par certain municipal auction-rate securities to settle charges with the Financial Industry Regulatory Authority that it failed to disclose ARS risks to customers and properly supervise sales.

WASHINGTON - Securities and Exchange Commission chairman Mary Schapiro said yesterday that the SEC will propose new rules for rating agencies, stemming from a broad but "intense review" of how to restore confidence in the financial system.

BRADENTON, Fla. - Tennessee will conduct a comprehensive review of a program required by state law that is designed to educate cities and counties about using derivatives such as swaps and forward-starting purchase agreements, the state's new comptroller said Tuesday.

The Government Finance Officers Association and 11 other issuer groups are urging House Financial Services Committee chairman Barney Frank to reintroduce legislation that would require rating agencies to rate municipal and other securities on the basis of default alone. The move came after Moody's Investors Service last week assigned a negative outlook to the entire tax-backed local government sector.

WASHINGTON - The Municipal Securities Rulemaking Board yesterday asked the Securities and Exchange Commission to approve changes to EMMA that would allow issuers to voluntarily file non-required financial or operating data as well as event-based disclosures, including rating agency presentations and communications from the Internal Revenue Service.

CHICAGO - Detroit Mayor Ken Cockrel Jr. Monday unveiled a 2010 budget that features a slew of layoffs while leaving open the possibility of leasing city assets to wipe out an estimated $300 million deficit.