FGIC, XL Assurance give Alabama county debt ideas
NEW YORK, May 2 (Reuters) - FGIC Corp's bond insurance arm and XL Capital Assurance Inc, part of Security Capital Assurance SCA.N, said on Friday that they have made proposals to representatives of Alabama's Jefferson County in an attempt to resolve its debt problems.
The insurers have proposed using sales tax revenues as a means of raising capital and using proceeds to reduce the debt of the county's sewer system, they said in a statement.
Proposals have also been made to improve the operating efficiency of the sewer system, which would allow the county to renew its access to the capital markets and restructure its debt, they said.
FGIC and XLCA are the primary insurers of Jefferson County's sewer bond debt.
"FGIC and XLCA are confident that the ideas discussed over the past few weeks represent productive strides towards an overall solution to Jefferson County's debt crisis," the insurers said.
"We have presented a set of solutions that we believe to be fair for all parties, including Jefferson County's ratepayers and its bondholders," they added.
The county has one of the highest municipal debts in the country, run up through costly bond swaps.
If the county, home to Alabama's largest city, Birmingham, files for Chapter 9 status, it would be the largest municipal bankruptcy in U.S. history. (Reporting by Karen Brettell; Editing by Leslie Adler)
