Lawmakers from the bankrupt Jefferson County, Alabama, picked Citigroup Global Markets, part of Citigroup Inc., as its senior underwriter. Citigroup beat another public finance firm vying for the advisory slot. The county received proposals to run its bond refinancing from six financial firms, according to a resolution that was passed by county commissioners. In addition, the county also chose Public Resources Advisory Group as its adviser on the sewer warrants deal.
The bankrupt county planned to pursue a bond refinancing worth US$1.9 billion. The refinancing, which aimed to end the biggest case of municipal bankruptcy in the US, was expected to push through late this year.
Jefferson County filed for its negotiated plan of adjustment last June 30 with a US bankruptcy court. The plan contained agreements with JPMorgan Chase and other large Wall Street creditors. However, the planned refinancing scheme must first be confirmed by a federal judge.
According to portfolio managers and analysts, the scale of the bonds' defaults and losses were not seen since the 1930s. This would mean pricier borrowing for the county at a scale in which it hasn't seen for decades.
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