ST. PETERSBURG, Fla. -- The Louisiana State Bond Commission yesterday gave its blessing to a $140 million revenue bond issue to replenish the state's depleted insurance guarantee fund.

Pending approval of final details of the financing by the commission at its next meeting, on Sept. 29, the Louisiana Public Facilities Authority will sell the deal during the final week in September. The facilities authority has chosen an underwriting syndicate for the offering led by Smith Barney Shearson Inc.

Proceeds from the issue will be used to help cover unpaid insurance claims assumed by the Louisiana Insurance Guaranty Association.

The association takes over payment of property and casualty insurance claims when the firms writing these policies are unable to do so. Currently, the association faces a $275 million backlog of unpaid claims following the default of more than 60 insurance companies in the last four years.

The bond issue will cover claims payments through October 1994, said bond commission director Rae Logan.

The deal is supposed to give the fund a breathing space, Logan said in an interview. "Everyone wanted to move forward with it because it gives LIGA time to pay claims for a year," she said. "At the end of that period we will take another look and evaluate the need for any further borrowing."

The state official also said that a fee subcommittee of the commission yesterday trimmed about $160,000 off the expected cost of underwriting the bonds, reducing expected issuance expenses to about $1.4 million.

"Every dollar less in fee is an additional dollar that LIGA can use," Logan said.

The bonds are covered by a 2% annual assessment that the association levies on premium income charged by property casualty insurers in the state. Because the insurers get a tax credit for payments to the association, most analysts view the bonds as tax-backed obligations of the state.

According to Barbara Goodson, assistant director of the bond commission, the assessment is expected to generate about $65 million in revenue this year.

The association currently has $37.5 million of debt outstanding from a total of $50 million of variable-rate issues sold in 1990, Goodson said.

Last month, a potential roadblock to the bond issue was removed when the bond commission received a four-page legal opinion from Martha Hess, Louisiana's assistant attorney general. The opinion concluded that the sale should not be included in a new debt limit on state borrowings set by the state Legislature in June. That legislation caps state issuance to about $200 million per year.

Two weeks ago, confident that the bond issue would be sold, the guarantee fund decided to begin paying claims in full. Since April. the agency had been paying only 30 cents on the dollar on unpaid claims because of a cash shortfall.

The association's recent problems with repaying claims follows the collapse in 1989 of the Champion Insurance Co. That collapse triggered many other insolvencies as other insurers found they could not cover policies that they had shared with Champion.

In the four years since the Champion collapse, a New Orleans federal court has convicted 38 people on fraud charges related to the insurance industry in Louisiana.

In other action yesterday, the bond commission also approved $21.2 million in additional lines of credit for capital projects to be covered by the state's upcoming general obligation bond issue.

The new approval is in addition to $128.8 million in lines of credit already approved -- bringing the expected size of the GO issue to about $150 million.

Logan said she expects a $150 million state GO issue to be sold on a competitive basis in late November.

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