Alabama's Jefferson County has hiked forecasts for yields it expects to pay and increased the planned size of a bond sale vital to its reorganization plan to pay off Wall Street creditors and exit America's second-largest municipal bankruptcy, Reuters reported yesterday. According to documents revised after recent sharp increases in U.S. interest rates, which Jefferson County officials say could threaten their $4.2 billion negotiated plan of adjustment, the county now forecasts tax-free yields ranging from 4.5 percent to 7 percent on $1.98 billion of new debt. The county, whose finances were crippled by soured sewer system debt, corruption and a fall-off in revenue, had forecast in June that the late 2013 bond deals would total $1.89 billion and, depending on maturities as long as 40 years and type, yield between 3.5 percent and 6.75 percent. The bond monies would pay off sewer-system creditors owed $3.1 billion at about a 40 percent discount and fund capital spending on the county's sewer system. Another $1 billion of school and other county debt is also covered in the plan of adjustment.
