Bankruptcy

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.

WASHINGTON - A House subcommittee chairman, five state and local groups, and a Florida official are urging the Treasury Department and Federal Reserve to modify their commercial paper and troubled asset purchasing programs to include state and local governments, which are struggling under the current the credit crisis.

SAN FRANCISCO - California successfully issued $5 billion of notes this week in the midst of the deepest financial crisis since the Great Depression. The state's local governments issued a big sigh of relief.

WASHINGTON - Maryland Gov. Martin O'Malley yesterday announced more than $345 million in cuts to balance the state's fiscal 2009 budget, joining Virginia, Rhode Island, and many other states forced to continually rein in spending as their tax revenues plummet during the financial crisis confronting the nation.

BRADENTON, Fla. - Analysts say Jefferson County, Ala.'s proposed sewer debt restructuring plan faces numerous challenges, including a dysfunctional bond market and skeptical investors who may demand interest rates that make a deal unworkable.

WASHINGTON - The Senate Agriculture Committee chairman said yesterday that he plans to soon introduce legislation that would authorize and require the federal government to regulate derivatives.

WASHINGTON - Federal Reserve officials said Monday that currently there are no plans for their Commercial Paper Funding Facility to accept tax-exempt commercial paper, but that the Fed may reconsider this issue before the program starts Oct. 27.

BRADENTON, Fla. - The Jefferson County, Ala., Commission yesterday voted 3 to 2 against filing for bankruptcy.

CHICAGO - When General Motors Corp. last week lobbied Detroit's two pension funds to invest in its prominent downtown headquarters to help raise $500 million, some saw it as an illustration of the severity of the fiscal pressures facing the U.S. auto industry.

The Municipal Securities Rulemaking Board announced yesterday that it has tapped Janet Eakes, a former Freddie Mac senior vice president, for its newly created post of chief operating officer, and John Doyle, a principal in the municipal securities division of UBS Securities LLC, as director of project management.

CHICAGO - A Wright County, Minn., judge last week dismissed a lawsuit filed by Bridgewater Telephone Co. against the city of Monticello that argued its $26.4 million bond issue to fund the installation of a fiber-optic broadband communications network violated state law.

SAN FRANCISCO - With the deal slated to go before retail investors Tuesday, details remain scarce on the structure of California's planned $4 billion revenue anticipation note offering.