San Bernardino won't pay taxable pension bonds on maturity date

By Caroline Salls

Pittsburgh, Sept. 28 - The City of San Bernardino, Calif.'s taxable pension obligation bonds series 2005A-2 will not be paid on the Oct. 1 maturity date, according to a notice to bondholders from trustee Wells Fargo Bank, NA.

The trustee said the payment will not be made because of the pendency of the city's bankruptcy case and its inability to pay principal and interest on the bonds when due.

Wells Fargo said it cannot ascertain when the bonds will be paid, and it believes that the payment "will be withheld by the city for an indeterminate length of time."

According to the notice, any subsequent payment on account of the bonds will be under a special record date, which is unknown at this time.

San Bernardino filed for bankruptcy on Aug. 1 in the U.S. Bankruptcy Court for the Central District of California. The Chapter 9 case number is 12-28006.

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