CHICAGO - The Chicago Public Schools system hopes to settle on the terms of a $500 million private placement by the end of the week, launching a three-pronged restructuring of $1.3 billion of auction-rate and insured floating-rate bonds to stem the rise in interest rate costs as a result of the credit crunch and insurer downgrades.

The CPS system would privately place about $500 million of auction-rate securities from a 2003 series and 2007 series with an unnamed bank or broker-dealer, schools' treasurer David Bryant said this week.

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