Jefferson County, AL Can’t Make $636 million Debt Payment
Wednesday, February 25, 2009 8:04Alabama’s Jefferson County is unable to make a $636 million sewer debt payment due Friday. The county will hold an emergency meeting to vote on an extension request which they hope will buy some time.
The county was recently downgraded by the ratings agencies which resulted in accelerated principal and interest payments due to banks. The county is on the hook for an extra $53 million in accelerated payments since last spring last spring. Jefferson County is still reeling from the $600 million it lost in bad swap deals.
It isn’t just the sewer debt.
On March 12, the county has due the balance of a $110 million general obligation bond payment after last month making a partial payment of $5 million.
The county’s general obligation debt – which totals $255 million – is not part of the sewer debt. In addition to the general obligation and sewer debts, the county owes $926 million on $1 billion it borrowed for school construction, according to the county’s unaudited figures as of Sept. 30.
And the cost to get out of interest-rate swaps, which the county used in a failed effort to protect itself against rising interest costs on its sewer debt, has mushroomed to $608 million from about $180 million in March.
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February 25th, 2009 at 6:58 pm
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