Jefferson County, Ala., warrant forbearance extended to March 12 following $5 million payment

By Caroline Salls

Pittsburgh, Jan. 21 - Jefferson County, Ala.'s general obligation warrants forbearance agreement has been extended to March 12 after the county made a $5 million payment to the liquidity providers under its standby warrant purchase agreement on Jan. 15, according to a notice filed Wednesday.

As previously reported, the county entered into the liquidity facility with JPMorgan Chase Bank, NA and Bayerische Landesbank, New York Branch to provide a source of funds for the payment of the purchase price of warrants that are the subject of an optional or mandatory tender.

Under the liquidity facility, those providers purchased $118.74 million of warrants in March 2008, plus additional warrants purchased later under the liquidity facility.

The county is required to redeem the tendered warrants in six equal installments beginning six months from the date of tender if the warrants have not been remarketed before the redemption dates.

According to the notice, the first redemption was to be made on Sept. 15, but the county did not make that redemption, resulting in the occurrence of an event of default on the warrants indenture and the liquidity facility.

Jefferson County originally entered into the forbearance on Sept. 15.

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