The county of Orange has tapped Goldman Sachs Group Inc. as the lead underwriter for the sale of $600 million in bonds to refinance the county’s bankruptcy debt.
The county is looking to retire more costly debt issued in 1995 and 1996,after the county’s 1994 bankruptcy,with lower-interest bonds.
Citigroup Inc., Banc of America Securities LLC, Stone & Youngberg LLC and two other underwriters, which have yet to be picked, are set to work on the bond sale, county Treasurer John Moorlach told Bloomberg on Friday.
Merrill Lynch & Co. isn’t expected to take part in the sale. The investment bank played a central role in the county’s bankruptcy.
Officials from Merrill met with county supervisors earlier this year in an effort to win its first bond business since the bankruptcy.
The county sued Merrill in 1995 for providing investment advice that didn’t adhere to guidelines for municipalities.
Former Treasurer Robert Citron used money borrowed from Merrill and others to bet on the direction of interest rates by purchasing longer-maturity derivative securities.
The strategy, which first drew high returns, backfired as rates rose in 1994, resulting in losses of $1.6 billion and the county’s bankruptcy.
