Columbia S&L; Bonds for Sale; Value Debated : Thrifts: The cost of the failed institution’s bailout rests on what its junk portfolio nets. Some analysts believe it will be far short of $2.9 million.

Columbia Savings & Loan put its troubled junk bond portfolio up for sale again Wednesday amid growing signs that the maverick thrift will be among the nation’s most expensive S&L; failures, with some experts believing that it could cost taxpayers as much as $1.5 billion.

The recent free fall in prices for the risky, high-yield bonds has raised new doubts about whether the Beverly Hills-based thrift--which once boasted that it was the nation’s best-run savings and loan--can sell its portfolio at anything approaching the $2.9 billion the bonds are valued on its books.

Private analysts and executives familiar with Columbia’s finances said they believe that the thrift will be lucky to get $2 billion for the portfolio, adding that prospective buyers may spurn the sale altogether because of the nation’s economic uncertainties.

Selling the bonds at $2 billion or less means that Columbia, already insolvent by nearly $400 million, would have to recognize further losses that could easily boost the eventual cost to taxpayers to more than $1 billion and probably closer to $1.5 billion.

“The bottom line is that it’s going to be one of the big ones,” said Kenneth H. Thomas, a Miami consultant who specializes in following thrift junk bond investments. Thomas said he believes that $1.5 billion is “probably a minimum number” for the cost to taxpayers.

Under former Chief Executive Thomas Spiegel, Columbia was one of the nation’s strongest and most profitable thrifts. It built the biggest portfolio of junk bonds among the nation’s thrifts, owning more than $4 billion at one point.

But the collapse of the market that started late last year, combined with a clause in last year’s federal thrift bailout bill that required S&Ls; to sell their bonds, caused Columbia to hemorrhage, wiping out its net worth by early this year. Spiegel is now being charged by regulators with squandering the thrift’s assets. He also is being investigated by federal officials for possible criminal violations.

Columbia’s new management tentatively agreed to sell the bonds this summer for $3 billion to Gordon America, a Canadian-led partnership, in a deal that Columbia would have helped finance. But federal thrift regulators shot down the sale last month, citing concerns about financing arrangements and the lack of federal policies spelling out whether a sale of junk bonds can be financed.

Columbia is now considering bids in which the thrift would finance the deal as well as all-cash offers and bids in which Columbia would benefit if the bonds recover. Office of Thrift Supervision Director Timothy Ryan said the federal Resolution Trust Corp.’s Oversight Board, which oversees the mopping up of failed thrifts, will consider whether the RTC should help finance buyers of junk bonds.

Most junk bond experts believe that a financed deal would be the only way Columbia can avoid selling the bonds at a bargain-basement price.

Sources said Wednesday that officials from the Gordon investment group have told Columbia executives that they are still interested in buying the bonds.

Regulators had been criticized for canceling the transaction. But Columbia sources noted Wednesday that the junk bond market has tumbled so much in recent weeks that Gordon could have pulled out under original terms.

Even though it is deeply insolvent, Columbia has yet to be seized by regulators. Thrift regulators would like Columbia to sell the bonds before any takeover. Columbia is being run as if it were under government supervision, thrift executives say.

Regulators also released for the first time, at Columbia’s request, a full list of the thrift’s bond and preferred stock holdings. The portfolio is dominated by retail, media, health care and transportation issues that were sold by the collapsed Drexel Burnham Lambert investment bank.

The list shows major holdings in a number of troubled junk bond issuers, including Allied Stores, Eastern Airlines, Federated Department Stores, Southland Corp., Gillett Holdings, Western Union and Hillsborough Holdings/Jim Walter. Its largest single holding is an issue with a $143.5-million face value issued by RJR Holdings.