AL County Votes for Biggest Muni Bankruptcy

Discussion in 'Wall St. News' started by ASusilovic, Nov 9, 2011.

  1. Jefferson County, Alabama, commissioners voted 4-1 to file the largest U.S. municipal bankruptcy after reaching an impasse over concessions with holders of $3.14 billion of bonds.

    JPMorgan Chase & Co. (JPM), which arranged most of the debt to fund a sewer renovation, will likely take the biggest loss.

    A provisional agreement with creditors that commissioners approved in September included $1.1 billion in concessions and called for sewer-rate increases of as much as 8.2 percent for the first three years. The county was unable to get signed commitments from creditors, Commission PresidentDavid Carrington said today. Terms were changing even last night, he said.

    In addition, the county’s 25-member legislative delegation was unable to unite behind bills needed to implement the tentative settlement, including ways to generate revenue for a strained general fund.

    The vote by officials in Alabama’s most populous county occurred about a month after Pennsylvania’s capital of Harrisburg sought court protection citing millions in overdue bond payments tied to a trash-to-energy incinerator.

    Italy is a nice distraction from problems at home, isn´t it? :cool:
  2. “There’s not a doubt in my mind that you will see a spate of municipal-bond defaults,” the banking analyst Meredith Whitney, nodding her head, said on a Dec. 19 segment of CBS Corp.’s “60 Minutes.”

    “How many is a spate?” correspondent Steve Kroft asked.

    “You could see 50 sizable defaults, 50 to 100 sizable defaults, more,” said Whitney, 41, who made her name covering bank stocks. “This will amount to hundreds of billions of dollars’ worth of defaults.”
  3. just blame it all on the Mexicans