April 01, 2004

House GOP
Pension Conferees Ready Proposal To Break Impasse

House Republicans were preparing a proposal yesterday on aid for
multi-employer pension plans to present to conferees negotiating
differences between House and Senate versions of broader pension
legislation, CongressDaily reported. But the proposal was
not expected to win the support of Democrats.

The last formal conference
meeting broke down last Friday, when Democrats rejected a Republican
proposal after they said it would help too few multi-employer plans. A
Democratic staffer estimated that the first Republican proposal would
cover less than 4 percent of those plans. Democrats, in turn, made a
counteroffer to cover about 20 percent of plans, but Republicans
rejected that.

Senate staffers said they
expected a version of the proposal that Republicans offered last Friday,
with slightly more restrictions for multi-employers. But Democrats were
wary of the planned Republican proposal. 'It looks like it's been
tweaked in the wrong direction,' said Senate Finance ranking member Max
Baucus (D-Mont.), one of the conferees. Administration officials have
said they would recommend that the president veto the bill if it
included Senate-passed provisions helping multi-employers or allowing
companies with traditional pension plans to apply to the Treasury
Department for waivers from pension payments, the newswire
reported.

PG&E Urges Court to
Deny Move Against Bankruptcy Plan

PG&E Corp. said on
Wednesday that a move by two members of the California Public
Utilities Commission (CPUC) seeking to block a reorganization plan for
its bankrupt utility unit Pacific Gas & Electric should be denied,
Reuters reported. The San Francisco-based energy company said in a
filing at the U.S. Securities and Exchange Commission that the motion by
CPUC members Loretta Lynch and Carl Wood 'is untimely, without merit,
and the commissioners lack standing to appeal the confirmation order.'
On Tuesday, Lynch and Wood filed a motion in the U.S. District Court in
San
Francisco to stay implementation of the U.S.
Bankruptcy Court's order confirming the utility's plan to get out of
bankruptcy. Their motion argues that as a government agency, the CPUC
cannot enter into an agreement that binds future members of the
commission to the terms of the reorganization plan. A hearing on the
motion is set for June 3, but Lynch and Wood asked the District Court to
hear their motion on April 8, the newswire reported. Pacific Gas &
Electric plans to emerge from bankruptcy on April 12.

Air
w:st='on'>
w:st='on'>Canada Pension 'Deal'
Thwarted By Union Feud

Air
w:st='on'>Canada said yesterday it had
reached a key pension agreement with its largest union, but the Canadian
head of the machinists union dismissed the airline's claim, saying there
was no deal, Reuters reported. 'Our members' pensions are not
negotiable,' said Dave Ritchie, Canadian general vice-president of the
International Association of Machinists and Aerospace Workers. Earlier
in the day, Air
w:st='on'>Canada said it had reached a tentative
agreement on pensions with Jean Jallet, the head of a local section of
the union, which represents Air
w:st='on'>Canada's 11,500 maintenance
and ground crew. Air
w:st='on'>Canada CEO Robert Milton
praised the union for the 'decisive attempt to break the logjam
currently threatening our successful restructuring executive.' But
Ritchie said Jallet had no authority to bargain on pensions issues,
which are dealt with at a national level, the newswire reported. Air

w:st='on'>Canada said it still
considered the tentative agreement to be valid and expects the union to
complete a ratification vote by April 12, Reuters reported.

w:st='on'>
w:st='on'>U.S. Treasury
Official: GSE Shutdown Powers A Must

Any new regulator for Fannie Mae and Freddie Mac must have the power
to shut down the mortgage financing giants if they are threatened with
bankruptcy, a senior U.S. Treasury official said yesterday, Reuters
reported. 'Any new reform absolutely has to provide receivership
authority to the regulator of Fannie Mae and Freddie Mac,' said Treasury
Assistant Secretary for Financial Institutions Wayne Abernathy.
Abernathy's comments, during a panel discussion at the annual meeting of
the International Swaps and Derivatives Association, follow those by
Treasury Secretary John Snow a day earlier as the administration presses
for a stronger regulator of the mortgage financing giants and the
Federal Home Loan Banks.

A Senate panel is scheduled
today to draft a bill that would give a new regulator of
government-sponsored enterprises the power to wind down their operations
if they are threatened with bankruptcy. The Republican-sponsored
legislation is running into some opposition from Democrats.

Abernathy compared the
potential bankruptcy of Fannie Mae and Freddie Mac to the economic
damage caused by the savings-and-loan crisis, saying such receivership
powers would allow for a better resolution that would limit the impact
on healthier financial institutions. Abernathy also said it was
important for investors to know 'there is no federal guarantee'
protecting the debt obligations of Fannie Mae and Freddie Mac and that
the Treasury was indifferent if the debt spreads, which affect their
cost of borrowing in capital markets, are hurt by the Treasury's stance,
the newswire reported.

American Senior Citizens
Over 60 Less Likely To Feel Financially ''Overwhelmed''

Americans over 60 face
more serious financial difficulties, but they are much less likely to
feel overwhelmed by such problems, according to a recent survey
conducted by InCharge(R) Education Foundation Inc., the education arm of
InCharge(R) Institute of America, a non-profit organization specializing
in personal finance education and credit counseling, SeniorHeadlines.com
reported.



The December 2003 survey of debt-stressed individuals who contacted
InCharge(R) Debt Solutions last year shows that only two in ten (21
percent) debt-stressed seniors feel 'overwhelmed' by their current
financial situation -- significantly lower than their younger
counterparts (36 percent).'

 

Although they have a greater ability to cope with stress, older
Americans still carry a greater financial burden, according to the
study. Sixty-two percent of debt-stressed seniors are financially
insecure about retirement, and only 23 percent of those already retired
believe they will have enough money to last. A full 42 percent of
debt-stressed seniors worry they will become homeless. One-third (35
percent) has considered filing for bankruptcy. 

Fitch Comments on Bankruptcy
Court Ruling Regarding United Airlines’ Special Facility Revenue
Bonds

Fitch Ratings announced
in a press release yesterday that it believes that Tuesday’s court
decisions in the United Airlines' bankruptcy proceedings regarding the
treatment of the carrier's special facility bonds sets a
precedent that may
weaken security provisions behind certain municipal leased-backed bonds,
but potentially strengthen bondholder security on other lease structures
and provide guidance for structuring future transactions as true leases.
The ruling came in response to a motion filed by United in which the
airline asked the bankruptcy court to determine if certain special
facility bonds issued on the airline's behalf constituted a true lease
subject to the provisions of Section 365 of the United States Bankruptcy
Code, or instead were 'disguised financings' that should be treated by
the court as unsecured debt of the airline.

Banks Release Price Talk For
Debt Deal

Underwriting banks for
NTL Inc, Britain's largest cable operator, have released price guidance
for the company's coming 800 million sterling equivalent debt deal,
market sources said on Wednesday, Reuters reported. Proceeds for the
deal will be used to pay down existing debt. The company restructured
nearly $11 billion of corporate bonds into equity and handed control to
its former bondholders before emerging from chapter 11 bankruptcy in
January 2003. The debt for the upcoming 800 million sterling deal will
be sold in four parts via the company's NTL Cable PLC subsidiary,
although the size of each part has not yet been determined, Reuters
reported. The deal is being jointly led by Credit Suisse First Boston,
Deutsche Bank Securities, Goldman Sachs, and Morgan Stanley.

Kmart Sues Hundreds of Local
Governments to Slash 2002 Property Tax Bills

Kmart is suing hundreds of local governments in a
w:st='on'>Chicago bankruptcy
court, trying to get out of paying millions of dollars the discount
chain owes in taxes across the country, the Knight-Ridder reported.
Kmart says its 2002 tax bill should be cut dramatically and it should
get a refund for 2001 because it paid too much. The suit does not
involve 2003 taxes. At issue are the taxes levied on store fixtures such
as shelves and display cases and equipment such as cash registers,
computers, phone systems and forklifts. Kmart is objecting to the way
property appraisers value the equipment, the newswire reported.

Adelphia Noteholders Also
Oppose Exclusive Reorganization Rights

A group of noteholders has
added its voice to the 'chorus of parties' opposing the continued
exclusive reorganization rights of Adelphia Communications Corp. ,
according to court papers. The objection filed Monday in the U.S.
Bankruptcy Court in Manhattan by an ad hoc panel of subordinated
noteholders seeks to end the company's sole right to file a plan of
reorganization and lobby creditor support because the panel says
Adelphia's current plan lacks support from the majority of creditors in
the case. A hearing on the exclusivity issue has been scheduled for
April 26 in
w:st='on'>Manhattan. Objections are due
Friday.

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