Friday, March 30, 2012

Reuters: Bankruptcy News: Alabama county to default by tapping bond reserve

Reuters: Bankruptcy News
Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
Alabama county to default by tapping bond reserve
Mar 30th 2012, 17:57

BIRMINGHAM, Ala., March 30 | Fri Mar 30, 2012 1:57pm EDT

BIRMINGHAM, Ala., March 30 (Reuters) - Alabama's Jefferson County will technically default on another $6.38 million payment by using bond reserves to pay for the financing of a new satellite courthouse, a county official said on Friday.

Jefferson County, which on Nov. 9 filed a $4.23 billion municipal bankruptcy, the nation's biggest, said o n W ednesday it would skip a $15 million payment on general obligation warrants due April 2. The county has about $200 million of GO debt. For details, please see.

"This is more about how it works. The bond reserve is the first thing you hit if there is not enough cash to make payments," said Jefferson County Commissioner Jimmie Stephens, who chairs the county's finance committee.

The satellite courthouse in Bessemer is constitutionally mandated and is considered an essential service, according to Stephens. It was financed with $86 million of lease warrants. A new jail built in the 2009 renovation has never opened due to a lack of funds, but the courthouse is operating.

In November, Jefferson County filed for bankruptcy protection after bargaining for years with creditors to reduce $3.15 billion of sewer debt. Four former county commissioners were found guilty in a scandal tied to the sewer financing.

Separately, lawyers for Financial Guaranty Insurance Corp asked the federal judge overseeing the Jefferson County bankruptcy case to allow hikes in sewer rates that would increase revenues pledged to the system's $3.14 billion of defaulted sewer warrants. The bond insurer said in court papers it insures about $1.6 billion of sewer warrants

(Reporting By Verna Gates; additional reporting by Michael Connor in Miami; Editing by Dan Grebler)

  • Link this
  • Share this
  • Digg this
  • Email
  • Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com.

If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions

0 comments:

Post a Comment

 
Great HTML Templates from easytemplates.com.