SAN FRANCISCO -Sacramento County plans to restructure $350 million of auction-rate pension obligations next week after seeing interest rates on the debt surge to 10.5% from 6.5% in the first two months of the year.

The county, California's eighth largest, aims to refund its taxable series 2004C-1 bonds on March 18 with floating-rate notes issued in monthly mode at the one-month Libor plus a premium. It expects to pay a 1% premium.

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