Bankruptcy

DALLAS - Bryan, Tex., one of four cities that make up the Texas Municipal Power Agency, has filed a flurry of legal challenges to a $1.7 billion refinancing plan, claiming that the TMPA cannot obligate the city to more debt without its approval.

While Jefferson County, Ala., works to extend forbearance agreements that expire Friday, the county’s trustee has said that defaults have occurred on the county’s sewer debt.

WASHINGTON - The Treasury Department must take the place of American International Group Inc. as guarantor of transit agency sale-leaseback deals to avoid "financial disaster" for state and local governments, a group of lawmakers warned Treasury and Federal Reserve officials yesterday.

WASHINGTON - The Municipal Securities Rulemaking Board plans to "get into the ballgame" and encourage federal regulators to address liquidity concerns in the municipal market as part of their response to the credit crisis, MSRB chairman Ron Stack said yesterday.

The municipal bond division of the Securities Industry and Financial Markets Association plans to present Robert Foran, interim executive director of SIFMA's Foundation for Investor Education, and Dan Keating, chief operating officer at Samuel A. Ramirez & Co., with honor roll awards at a luncheon in New York today.

BRADENTON, Fla. - Jefferson County, Ala.'s counterclaims seeking a jury trial and more than $100 million in damages against Financial Guaranty Insurance Co. and Syncora Guarantee Inc. should not be dismissed, the county's attorneys said in a 23-page brief filed in federal court Thursday.

City National Securities, BNY Mellon Capital Markets LLC, and Harris Investor Services Inc. have agreed to repurchase a total of more than $60 million of illiquid auction-rate securities and pay $715,000 in fines to settle charges over alleged abusive ARS sales practices, the Financial Industry Regulatory Authority announced yesterday.

WASHINGTON - The credit crisis' adverse impact on state and local governments makes legislation to improve municipal market disclosure more important than ever so that investors can better understand the tax-exempt debt they own, Securities and Exchange Commission chairman Christopher Cox told a congressional panel yesterday.

BRADENTON, Fla. - Jefferson County, Ala., officials today expect a report from their finance director on how to come up with $20 million for the first accelerated payment on $120 million of variable-rate general obligation warrants that are now being held by two banks.

WASHINGTON - Members of the House Committee on Oversight and Government Reform blasted the major rating agencies for their role in the financial crisis yesterday, claiming internal memos showed they knew the entire financial system could be placed in jeopardy because of their unduly high ratings for subprime-related debt.

WASHINGTON - The Brazos Higher Education Service Corp. has extended to the end of the month the deadline for issuers to agree to voluntarily tender, at less than par, roughly $6 billion of outstanding taxable student-loan related securities so that it can restructure them as term floating-rate notes.

The credit rating agencies are using the financial crisis they helped create as an excuse for not putting an end to their discriminatory system for rating municipal bonds, California Treasurer Bill Lockyer told the chairman of a House panel that is scheduled today to examine the roles rating agencies played in the financial crisis.

The Municipal Securities Rulemaking Board plans to discuss the ongoing development of both the Electronic Municipal Market Access program and its short-term transparency system for auction-rate securities and variable-rate demand obligations at a three-day meeting that begins today at its Alexandria, Va., headquarters.

The Municipal Securities Rulemaking Board yesterday launched the first phase of a new electronic "MSRB Gateway" that will serve as a single, secure online portal for market participants and their designated agents to file documents with the board, according to a notice issued by the board last week.

The Government Finance Officers Association's executive board on Friday adopted guidance that strongly discourages an issuer from allowing a dealer-financial adviser to switch roles and become the underwriter in a negotiated municipal bond transaction.

BRADENTON, Fla. - The insurers of Jefferson County, Ala.'s nearly $3.2 billion of troubled sewer debt have filed a motion in federal court seeking to dismiss claims that negligence and fraud by the insurers have pushed the county to the brink of bankruptcy.

SAN FRANCISCO - The California Redevelopment Association plans to file a lawsuit challenging a $350 million shift of funds to the state government from redevelopment agencies.

WASHINGTON - Record low single-family housing starts in most parts of the country will not add to the tax revenue woes troubling state and local governments for at least a year, but deteriorating finances for municipalities may require federal assistance, market participants said yesterday.

DALLAS - After finally obtaining the go-ahead from a Texas district court judge to issue debt from a $1.35 billion authorization, the Dallas Independent School District now confronts a dysfunctional credit market and also faces a tight deadline to qualify the bonds for the state's triple-A rated Permanent School Fund guarantee.

WASHINGTON - Hundreds of municipal issuers of auction-rate securities are still grappling with failed auctions that have resulted in sky-high interest rates, eight months after broker-dealers stopped supporting auctions and the ARS market collapsed.