SAN FRANCISCO - San Diego County is facing surging rates on its variable-rate pension debt, forcing California's second-most populous county to consider tapping reserves to pay down the debt and to cancel plans to issue more variable-rate paper.

The variable-rate market instability of past months has convinced officials in San Diego to restructure a $375 million lease-revenue bond offering, which was previously planned to include $75 million of variable-rate demand obligations, as an all fixed-rate deal. The county has delayed the sale until market conditions stabilize.

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