Jefferson County has until Friday to post $184 million in collateral or insurance to prevent the costly terminations of its interest rate swaps, but in two more material event notices Wednesday night, the county says it will meet neither requirement.

PDFs of Jefferson County’s latest event notices can be found here and here.

“The County has notified the counterparties to the Swap Agreements that it does not
presently intend to post collateral or provide insurance to the counterparties for its obligations under the Swap Agreements,” the county said in the notice.

That means that the counter parties to the interest rate swaps could terminate the agreements. If that happens, Jefferson County would have to pay millions in fees, negotiate with the counter parties or go bankrupt.

“The aggregate amount of the termination payments that would be due if all of the swap transactions are terminated was approximately $184 million as of February 27, 2008,” the county said in the notice Thursday.

The county currently has 13 swap agreements with a total notional amount of $5.4 billion. Those swaps are the subject of an on-going SEC investigation and possibly a parallel criminal investigation by the Justice Department. Investigators want to know whether investment bankers gave kickbacks, gifts or other favors to public officials in exchange for bond swap deals with Jefferson County.

“The County is working with its advisors to identify and analyze all feasible means to address the current difficult situation,” the county said in what has become a familiar refrain. “However, as of the date of this notice, the County can provide no assurance that net revenues from the sewer system will be sufficient to permit the County to meet the interest rate and amortization requirements of the Liquidity Facilities.”