Talks on in Texas on how to reduce or restructure debt from Super Collider.

DALLAS -- Texas officials are evaluating options to reduce or restructure $500 million in debt incurred from the state's investment in the failed Superconducting Super Collider project after finalizing a $720 million settlement agreement with the federal government.

"There are several options being considered, and I anticipate.. a decision within the next several weeks," said Del Williams, vice chairman of the Texas National Research Laboratory Commission, the state agency created to oversee the high-energy physics pro, jeer.

Williams, who is also general court, set at Dallas-based First Southwest Co., said state officials have been discussing alternatives since early this month when they finalized the agreement with the federal Department of Energy.

Under the agreement announced this summer, the state will receive $145 million in cash, a $65 million grant to help convert the science project into a regional medical center, and $510 million in land, buildings, and equipment at the project south of Dallas.

The state leadership, the Texas Public Finance Authority, and the commission are now determining the best use of the assets, Williams said.

"I don't think it would be wise for me to discuss all the options that are being put on the table. Some involve proprietary structures ... and there will be other ideas brought forward," Wiliams said.

The state issued $250 million in general obligation bonds and $250 million in lease revenue bonds, and used about $400 million of the $500 million in proceeds for the project. Texas had a total bond authorization of $1 billion, but only issued half before the project was canceled by Congress in the fall of 1993.

One option could involve using the remaining $100 million in proceeds and the $145 million in cash from the settlement to redeem the lease revenue bonds. The state also could sell another $250 million in general obligation debt, which has been authorized but not issued for the project, and use proceeds to pay off the lease revenue bonds.

"Those are the types of options being discussed," said Sandra Hauser, general counsel for the Texas Public Finance Authority.

However, some conflicts could emerge. Texas Comptroller John Sharp has recommended that the state's authorization to issue $250 million more in general obligation bonds for the super collider and $250 million more in lease revenue bonds be revoked. if other state politicians agree, substituting general obligation debt for lease revenue debt could be blocked.

Meantime, bond rating agency analysts said that Texas has appropriated funds to pay bondholders through Aug. 31, 1995, or the end of the biennium, and therefore has time to consider the issue.

"The question is whether they want to take out the debt or not," said Hyman Grossman, managing director for Standard & Poor's Corp. He said that it would make sense to him to use the cash from the settlement to redeem the lease revenue bonds because they are high interest rate bonds.

Grossman and others expect a decision by late December.

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