from Bloomberg:
Muni Investors Kept in Dark as Finances Unravel (Update1)
By Darrell Preston
Oct. 10 (Bloomberg) -- U.S. municipal debt investors, shaken by the auction-rate securities meltdown and collapse of bond insurers, face another year in the dark as Congress delays legislation to improve disclosure.
Lawmakers and regulators preoccupied with the worst credit crisis since the Great Depression means investors will have to continue with a disclosure system that didn't give them Detroit's 2006 financial report until this March. Hearings in Congress to address new rules for the $2.66 trillion market that the Securities and Exchange Commission calls inadequate were canceled last month and have yet to be rescheduled.
``We have the worst disclosure standards in the world's capital markets,'' said Tom Weyl, board member of the National Federation of Municipal Analysts and vice president for municipal research at Boston-based Eaton Vance Corp., which manages about $18.4 billion of municipal bonds. ``This is something everyone is turning a blind eye to.''
Demand for information has never been greater as municipal bonds head for their worst year since 1999, defaults rise and borrowers increasingly use derivatives to hedge their interest- rate risk. Less than 1.5 percent of the municipal bond issues sold in 2007 provided annual financial statements, according to Washington-based Edgar Online Inc., which tracks filings.
`Tenuous Position' ``Walls have been built around access to public information in the municipal bond market,'' Philip Moyer, chief executive officer of Edgar Online, said in a Sept. 9 letter to SEC Chairman Christopher Cox. ``The lack of consistent and detailed transparency puts investors and municipalities in a highly tenuous position.'' .......(more)
The complete piece is at:
http://www.bloomberg.com/apps/news?pid=20601213&sid=awG0AZlwmKyk&refer=home