Bond insurers Financial Guaranty Insurance Co. and XL Capital Assurance Inc. Friday announced a plan they say would help Jefferson County, Ala., solve its current debt crisis, including a solution in which the county would issue more bonds backed by sales tax revenues to retire some of the old debt.

Though the details are still being finalized, the insurers proposal calls for the county to issue about $1.7 billion in sales tax-backed debt. The proceeds of the sale would be used to refinance about $1 billion in education warrants to which the sales tax revenues are currently pledged, and about $600 million to $650 million in sewer warrants, said Slayton Dabney, the lead King & Spalding LLP attorney on the project.

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