Bankrupt San Bernardino Skips $1 Million Bond Payment
San Bernardino, the second-largest U.S. city to enter Chapter 9 bankruptcy, failed to make a $1 million payment due Oct. 1 on pension bonds, according to a Municipal Securities Rulemaking Board filing dated today.
The missed payment is for a 2005 taxable issue, according to the regulatory filing by Wells Fargo Bank, trustee for the debt.
The city of 209,000, about 60 miles (100 kilometers) east of Los Angeles, voted in July to skip payments of $3.4 million to bondholders of its pension debt and $2.2 million for retiree health care before it sought bankruptcy protection on Aug. 1.
“An installment of interest in the amount of $1,014,447 was due from the city on Oct. 1, 2012,” the bank said. “The city did not transfer any funds to the trustee for payment of the interest.”
San Bernardino, the third California municipality to enter bankruptcy since June, has about $90 million of outstanding bond debts, according to budget documents, and another $200 million owed to holders of securities issued by the city’s now-dissolved redevelopment agency. The largest U.S. city in bankruptcy is Stockton, California.
The case is In re San Bernardino, 12-28006, U.S. Bankruptcy Court, Central District of California (Riverside).
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