The Jefferson County, Ala., Commission on Thursday is expected to approve another settlement with creditors over $105 million of defaulted Series 2001B variable-rate general obligation warrants.

The deal is with Bayerische Landesbank, which holds $52.875 million of the debt, and JPMorgan, which holds $52.125 million. The principal on the warrants has long ago accelerated but the cash-strapped county has not paid it.

The restructuring would return the warrants to their original maturity schedule though 2021, and waives default interest rates and post-bankruptcy interest, according to the Birmingham News, which said the “agreement is contingent on reaching a satisfactory agreement with JPMorgan regarding the sewer debt.”

JPMorgan is the largest holder of $3.1 billion of defaulted sewer warrants. The county, in the midst of bankruptcy proceedings, has not announced any deals regarding the debt-laden sewer system, and some commissioners have warned that repudiation of $1 billion to $2 billion is possible.

The GO warrant agreement would be the third settlement over outstanding debt reached by the county.

In February, the county entered a settlement with Depfa Bank PLC to reduce the interest rate on $162.5 million of variable-rate school warrants. In return for concessions, Depfa agreed to support the county’s plan of adjustment for exiting Chapter 9, and to waive all of its defaults.

In December, the first debt restructuring was approved between Jefferson County and bond insurer Ambac Assurance Corp. The deal restructured $82.5 million of lease revenue warrants sold in 2006 to build a county courthouse.

The county negotiated with Ambac to reduce annual debt payments and extend the final maturity by 11 years to 2037 from 2026. Investors and Ambac will be made whole eventually.

Last week during a court hearing on Jefferson County’s exit from bankruptcy, an attorney said that a reorganization plan could be filed by June with confirmation hearings by Thanksgiving.

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