LOS ANGELES -- An $82 million Sun Valley Public Improvement Corp. bond issue that funded a road through undeveloped land west of Phoenix might face an accelerated payoff this month, according to a disclosure notice released Friday.

The Sun Valley assessment lien refunding bonds, Series 1987 A, can become immediately due and payable if a letter-of-credit provider declares a default in connection with a complex reimbursement agreement, the notice says.

Lawyers representing the improvement corporation and Maricopa County, Ariz., prepared the notice. The country, while not liable for repayment of the Sun Valley bonds, approved part of the transaction's details.

The disclosure statement stresses that the county and improvement corporation "cannot determine if the actual default notice will be given or the timing of such notice." But lawyers said they wanted to inform bondholders of the possibility that payment on the full amount of principal and accured interest could be accelerated.

The country and the improvement corporation said they "have been advised that an event of default may have occurred" and may be continuing under a reimbursement agreement between financial guarantors of the transaction.

The reimbursement agreement initially involved Security Pacific National Bank and Heron Financial Corp. Security Pacific provided protection for bondholders with a direct-pay, irrevocable letter of credit. In turn, Security Pacific expected repayment for any draws through a guarantee from Heron financial, part of a London-based conglomerate.

Bank of America which recently merged with Security Pacific, is now the letter-of-credit provider.

The possible default under the reimbursement agreement requires action by the close of business in London on July 30, 1992, according to Friday's statement. Otherwise, Bank of America "may deliver a written notice, effective as of July 31, 1992, that an 'event of default' has occurred and is continuing under the pertinent indenture pertaining to the [Sun Valley] bonds," the statement continues.

Based on the letter-of-credit support, Moody's Investors Service rates the Sun Valley bonds Aa3 and Standard & Poor's Corp. rates them A-plus.

Private supporters of the road pitched the financing idea to Maricopa County in the mid-1980s as a means of permitting access to about 48,000 acres of undeveloped land 40 miles northwest of Phoenix.

County supervisors supported the deal partly because they were offered title to a public road for which they paid none of the construction costs. Rather, assessments on the land would cover the financing.

But a booming real estate market in the Phoenix area ran out of steam in the late 1980s. And the softening market hit hardest in remote areas of Maricopa County, where land speculation had been particularly intense because of high-growth expectations.

That problem, and a structure that caused some assessments to skyrocket, prompted some landowners to file for bankruptcy protection. Others went into arrears on their assessments.

The bonds would become immediately due and payable if Bank of America gives a default notice. Under such a scenario the bond trustee, First Interstate Bank of Arizona, would be required to draw against Bank of America's letter of credit for the full amount of principal and accured interest on the bonds.

The statement cautions that "no interest will accrue on the bonds after July 30, 1992," if the letter of credit is drawn upon and the issue is accelerated. "Bank of America has also reserved the right to deliver the default notice prior to July 30, 1992," the statement adds.

Lawyers prepared the statement so bondholders or prospective bondholders could evaluate the impact on the bonds, if any, if Bank America declares the default.

A market source said there have been reports of the Sun Valley bonds changing hands previously at a discount. Bondholders may rethink such pricing levels if they know there is a possibility that payment on the full principal amount could be accelerated soon, the source added.

An official from Heron Financial in Los Angeles declined to comment on any actions his firm might be considering regarding the transaction. He referred calls to an official in London, who could not be reached for comment.

Gust Rosenfeld, the law firm representing Maricopa County, and Quarles & Brady & Fannin, the law firm representing the Sun Valley Improvement Corp., prepared Friday's disclosure statement.

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