BRADENTON, Fla. — The Jefferson County, Ala., Commission Friday avoided filing the largest municipal bankruptcy in U.S. history by agreeing to a restructuring deal with creditors holding about $3.14 billion of defaulted variable- and auction-rate sewer warrants.
Commissioners voted 4 to 1 to accept a term sheet outlining major facets of the deal, including concessions of about $1.09 billion by creditors in return for restructuring $2.05 billion of 40-year debt.
The deal requires three annual sewer rate increases of 8.2% starting this November, and 3.25% each year starting in 2014.
“It’s time for a resolution of this lingering debacle,” said Commissioner Joe Knight.
JPMorgan, the county’s largest creditor, released a statement that said, “We are encouraged by the county’s decision to refinance the sewer debt and look forward to working toward a successful resolution in the coming months.”
