Jefferson County, Ala., sewer warrant insurers agree to debt service reserve fund draw forbearance

By Caroline Salls

Pittsburgh, Sept. 12 - Jefferson County, Ala., said the interest due on its sewer revenue warrants beginning on Sept. 1 has been paid and will continue to be paid through the end of September from cash and surety bonds held in a debt service reserve fund, and the county has secured forbearance agreements from its insurers in connection with the debt service reserve fund draws.

According to a notice released by the county, the county will draw on the cash first, but it will also be required to draw on the surety bonds held in the debt service reserve fund to pay a portion of the interest coming due during September.

As a result, Syncora, Financial Guaranty Insurance Corp. and Financial Security Assurance, Inc. have each agreed to forbear through the end of September from requiring reimbursement from the county for any draws on their surety bonds and have instructed the warrants trustee not to exercise its remedies in connection with the draws at this time.

In addition, according to a Wednesday statement from Alabama governor Bob Riley, representatives from Jefferson County, the governor's office and some of the county's creditors met for several hours earlier this week to continue discussions about resolving the county's sewer debt.

The governor said he will continue to work with the parties to try to reach a solution.

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