July 15, 2011 / 7:37 PM / 7 years ago

SEC's U.S. muni market review takes it to Alabama

WASHINGTON, July 15 (Reuters) - To learn more about the state of the U.S. municipal bond market, the Securities and Exchange Commission said on Friday it will venture straight into the heart of some of its darkest moments — Jefferson County, Alabama.

Jefferson County, home to Birmingham, Alabama’s largest city, has been close to becoming the largest municipal bankruptcy in U.S. history for the past three years over $3.2 billion in sewer bonds it issued and the swaps agreements it entered into on the debt. A resolution to the soured debt deals could come by the end of the month.

SEC Chairman Mary Schapiro will visit Jefferson County on July 29, along with Commissioner Elisse Walter, who is focusing on making market reforms, and the SEC’s trading and markets director, Robert Cook.

The agenda for the day will feature 29 moderators and speakers, including Representative Spencer Bachus, an Alabama Republican who chairs the House Committee on Ways and Means.

It will cover distressed communities, small issuers, disclosures, derivatives and price transparency — topics that encompass many of the county’s problems stemming from efforts to modernize its sewer system.

The SEC, which enforces the rules for the municipal bond market that the Municipal Securities Rulemaking Board writes, has been reviewing the state of the municipal market for more than a year. The review will culminate in a series of recommendations on improving transparency, financial reporting and investor protection in the bonds that states and local governments sell to finance capital works projects and other areas of civic life.

The commission has also held hearings in Washington, D.C., and San Francisco. (Reporting by Lisa Lambert; Editing by Leslie Adler)

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