Bonds

Re: Tom Petruno's markets column "Investors face their fears in muni debt," May 23: I finally sold my municipal bonds and bought safer Ginnie Maes. I will just pay some more tax rather than risk default. With car dealerships closing, cities will be hard pressed to pay their bonds too. Politicians need to make the hard decisions to begin laying off state employees. The fact that they are talking about cutting welfare to families shows they still are not serious about budget cuts.

Re: Kathy Kristof's personal finance column "Blame high exec pay on corporate boards," June 14: One major culprit in this corporate charade was left out: the institutions, mainly mutual funds, that control more than 65% of shareholder votes. The institutions want investing "advice" and special access to bonds and other corporate offerings. Corporate managements want support for their proposals. These unholy alliances quietly emasculate attempts by individual shareholders to achieve change.

Airport commissioners Monday approved the sale of more than $1.6 billion in bonds this year to help pay for long-awaited improvements to Los Angeles International Airport and to refinance previous bonds for terminal projects. About $700 million of the bond issue will finance construction of a new cross-field taxiway, airfield intersections and firefighting facilities. The proceeds also will help pay for improvements to the Tom Bradley International Terminal, new escalators and elevators throughout the airport, a new baggage system for Terminal 3, and the purchase of property near LAX. The balance of $925 million will be used to refinance bonds that have been sold to pay for other airport improvements.

The drop in interest rates has prompted the Palos Verdes Library District to refinance a $16-million bond that was issued in 1991 to pay for the construction of the Peninsula Center Library in Rolling Hills Estates. Library officials said the district has already repaid $2 million of the 25-year bond that was issued and will refinance the remaining $14 million. Officials said capitalizing on the low interest rates will save homeowners an estimated $1.3 million in taxes over the next two decades.

'Better safe than sorry" turned out to be the winning motto for many mutual fund managers and their investors, as 2007 made a sudden transformation from an easy-money era to a painful credit crunch. When the debt markets seized up in the wake of the housing downturn and mounting mortgage defaults, bond funds that shunned risky sub-prime securities in favor of government IOUs and other relatively safe holdings notched solid returns.

Southern California Edison Co., the state's second-largest utility, plans to sell $500 million of debt as soon as this week, according to a person familiar with the offering. The sale will consist of first-mortgage bonds due in 2038, said the person, who declined to be identified because terms aren't set. The bonds may price to yield 1.6 to 1.65 percentage points higher than U.S. Treasuries of similar maturity, the person said.

A unit of Ambac Financial Group Inc. lost a crucial top AAA credit rating Friday, raising questions about the bond insurer's ability to win new business and possibly forcing some investors to sell billions of dollars of municipal bonds and other securities guaranteed by the company. Fitch Ratings cut Ambac Assurance Corp.'s top rating after the bond insurer, citing weak demand, scrapped plans to sell $1 billion of new equity. Ambac, the world's No.

New York state insurance regulators confirmed Wednesday that they met with some major U.S. banks to discuss raising fresh capital for struggling bond insurance companies. Talks with the unnamed banks were part of New York State Insurance Superintendent Eric Dinallo's effort to stabilize the bond guarantors and bolster the industry's finances, agency spokesman Andrew Mais said.

California sold $3.2 billion of tax-exempt bonds to help cope with a state budget deficit. Individual investors bought $1.46 billion of the securities, or 46% of the total, in a three-day offering, with institutions buying the rest. There was enough demand for the debt to lower the yield on bonds due in July 2009 to 2.05%, 0.15 of a percentage point less than the rate indicated at the start of the offering Tuesday. That compares with a 1.93% yield on U.S. Treasury notes with the same maturity.

A proposal by the Schwarzenegger administration to use $170 million in voter-approved bond money for projects benefiting two private railroads is drawing ire from Southern California officials who want the funds for road improvements and other projects.