BRADENTON, Fla. - Jefferson County, Ala., commissioners today will vote on resolutions to authorize new payment extensions for troubled sewer debt and extension of forbearance agreements on payments for related swaps on which the county owes $748 million in termination payments.

The agreements being considered today would delay until May 29 some of the accelerated payments on variable-rate sewer debt as well as most swap termination payments. The existing forbearance agreements expired yesterday.

The county is not expected to pay anything for the new forbearance agreements except for certain payments on interest that are due. The amount of interest to be paid was not immediately available.

The variable-rate demand sewer warrants being addressed today are being held by JPMorgan, as liquidity agent, have Bank of New York Mellon as trustee for bondholders, and are insured by Syncora Guarantee Inc. and Financial Guaranty Insurance Co. The amount of the variable-rate warrants subject to the agreement was not immediately available.

Jefferson County originally had approximately $3.2 billion of sewer debt, most of which remains outstanding and is in variable- and auction-rate mode.

The swap forbearance agreements being considered today are with JPMorgan, Bear, Stearns Capital Markets Inc., and Bank of America NA.

Bank of America on July 15 terminated its three swaps related to the debt and calculated its termination payment at $31.1 million. JPMorgan and Bear Stearns terminated their swaps on March 3 and have calculated that the county owes them $648.8 million and $9.06 million, respectively. JPMorgan purchased Bear Stearns last year.

A forbearance agreement with Lehman Brothers Special Financing Inc. expired Nov. 17 and has not been extended. Lehman, which is in bankruptcy, has calculated its termination payment at $59.1 million.

The swap termination payments owned by the county may not include additional amounts the county owed under regular swap payments before they were terminated by the various counterparties. A county official said yesterday that the regular swap payment amounts were in the process of being calculated.

The county also had swaps with JPMorgan on $120 million of variable-rate general obligation warrants not related to the sewer debt that are subject to accelerated payment under liquidity facility agreements. The firm terminated the GO swap in September, but the swap termination amount was only recently calculated at $7.9 million. Forbearances on the accelerated GO debt payments expire June 20.

Jefferson County's 2008 annual report, material event notices, and most forbearance agreements can be viewed at under the "Investor Relations" link.

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