ATLANTA -- New Orleans prices its long-awaited general obligation refunding issue today in what might still be -- even with the recent drop in interest rates -- a tough test for the city.

The $174 million negotiated deal, to be insured by AMBAC Indemnity Corp., will stretch out the maturity of city's outstanding $360 million of GOs from 2004 to 2021, liberating up to $19 million a year that otherwise would have been used for debt service, for capital programs.

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