To shed more than $1.4 billion in debt, Jefferson County, Alabama agreed to give up some of its power to set future sewer rates, a compromise that means the second-biggest U.S. municipal bankruptcy might be brought back to life decades from now.
Jefferson County, Alabama, raised yields on some junk-rated junior bonds to attract enough institutional investors to complete a sale of $1.8 billion of sewer debt as part of a plan to emerge from bankruptcy.
Jefferson County, which filed the biggest U.S. municipal bankruptcy until Detroit, is selling $1.8 billion of sewer debt to help exit court protection. Standard & Poor’s rates the bonds above junk. Investors disagree.
Commissioners of Jefferson County, Alabama, will consider new terms in a proposed accord with creditors on exiting bankruptcy, avoiding a collapse that would have let the parties back out of a settlement reached in June.
Commissioners in Alabama’s Jefferson County approved a deal with creditors, including $100 million in new concessions from JPMorgan Chase & Co., that may allow the county to end its two-year bankruptcy.
Jefferson County, Alabama, commissioners said they may cancel a $1.84 billion debt- reduction settlement tied to the county’s bankruptcy-exit plan unless creditors offer about $350 million in new concessions.