Issuers caught up in the current auction-rate security mess, trying to preserve the bond insurance they have paid for on outstanding auction-rate bonds while still refunding out of auction-rate mode, now have an option.

A new way of refunding auction-rate securities conceived by attorneys at Orrick, Herrington & Sutcliffe LLP may spare issuers the delicate decision of wanting to get out of auction-rate securities but not wanting to lose the bond insurance that is attached to those securities. The San Francisco AirportCommission has already signed on to refund about $200 million of 2006 auction-rate securities insured by Financial Guaranty Insurance Co.

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