O.C. Officials Visit Wall Street to Seek Support for Bond Issue

Drumming up early support for a crucial $800-million bond deal, a contingent from Orange County flew to New York on Monday to meet with Wall Street investors, bond insurers and rating agencies.

During the weeklong effort, officials led by Chief Executive Officer Jan Mittermeier will present details about how the bond offering will help the county emerge from bankruptcy.

Among those joining Mittermeier are Bruce Bennett, the county’s bankruptcy lawyer, and executives of Salomon Bros., the county’s financial advisor.

Today, county officials will present their case to the Municipal Forum of New York, a group that includes bond investors.

The large bond sale is key to the county’s recovery plan because proceeds will pay off vendors, note-holders and other creditors. To secure the deal, the county will pledge as collateral such major real estate assets as its Hall of Administration and county parks.

Money to pay off the bonds is expected to come from sales taxes, motor vehicle license fees and other revenue.

In order to sell the bonds, known on Wall Street as certificates of participation, the bankrupt county will attempt to earn investment-grade ratings and insurance from a major bond insurer.

An investment-grade rating from Moody’s Investors Service or Standard & Poor’s Corp. could save millions of dollars in borrowing costs for the county.

“We think we have a good story to sell,” said Christopher Varelas, a Salomon Bros. investment banker.

One person looking forward to hearing that story today is Barbara Flickinger, a Moody’s assistant director. “We’ve got a general outline,” she said, “but we want to see more numbers.”