SAN FRANCISCO -The Los Angeles Unified School District plans to refund $120.9 million of Ambac Assurance Corp.-insured variable-rate demand obligations early next month after seeing rates on the debt surge to as much as 10% after the insurer's credit ratings were cut.

The outstanding certificates of participation were issued in 2005 and are insured by Ambac with a liquidity facility from Dexia Group. Rates on the debt jumped after Ambac's credit ratings were slashed by the three major rating agencies earlier this year.

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