Jefferson County

After approving a fiscal 2013 budget this week, Jefferson County, Ala., advised holders of its general obligation warrants they would not be paid. The county, still in bankruptcy, reported in a in a disclosure that it plans to default on the GO warrants until they are restructured under a plan of adjustment in its Chapter 9 case. Jefferson County has about $95.5 million of outstanding fixed-rate GOs insured by National Public Finance Guarantee Corp.; another $105 million of GOs are in variable-rate mode. The $15 million that would have been paid on the GO warrants in the coming year is expected to help the county pay its bankruptcy attorneys, according to published reports. Jefferson County also disclosed to investors it did not make the required payment to the Jefferson Public Building Authority for the 2006 lease revenue warrants that were sold to build a county courthouse, jail, and a 911 emergency call system; the reserves will be used to make the interest payment, the county said. It is not clear if any principal payment is due. The lease warrants are insured by Ambac Assurance Corp. The county had planned to reject the lease through the bankruptcy process. In recent weeks, attorneys said in court filings that the county was negotiating with Ambac. County Commissioners this week passed a resolution agreeing to a term sheet that would reduce annual lease payments and extend maturities.