O.C. BONDS GO ON SALE TODAY : EFFORT IS FINAL PIECE OF BANKRUPTCY-ESCAPE PLAN.

Byline: E. Scott Reckard Associated Press 

The final piece of Orange County's bankruptcy-escape plan, the sale of nearly $900 million in bonds to refinance its debt, will take place today, a day earlier than scheduled.

The proceeds will be used to pay off existing bondholders, suppliers and debts to employees.

If the sale goes well, the county expects to be out of bankruptcy by next week.

It hopes to recover at least some of the losses by suing former brokers, accountants, lawyers and other professionals it contends must share blame for the debacle.

To woo investors, the county has bought costly insurance guaranteeing the bonds. The new debt also is backed by revenue from county property, including the civic center, and fees and tax receipts that could be diverted from road, park, beach and redevelopment funds.

County advisers said Tuesday that the sale was moved up in part because of strong demand. But some members of a Wall Street audience who heard a presentation on the bonds continued to question the county's willingness to pay its debts 18 months after it became the nation's biggest municipal bankruptcy case.

It was the second day of ``road shows'' for potential bond buyers, the first having been held Monday in Orange County.

Top county officials and advisers said the county has put its financial troubles behind it, has solved the underlying problems, and winds up this year with a $38 million budget surplus after drastic cuts.

Because of the insurance, credit rating agencies have given the new debt top ratings. But the county also had sought to reassure investors by having the bonds rated as if they carried no insurance - with disappointing results.

Using that standard, Moody's Investors Service gave the bonds a rating at the low end of investment grade. Moody's said the fees and taxes to be diverted from other uses would cover 1.6 times the peak levels of payments on the bonds.

But Standard & Poor's rated the bonds without insurance as ``junk,'' or speculative, saying it was possible the county could still default if it slipped back into bankruptcy.

Christopher Varelas of Salomon Brothers, the county's financial adviser, said even if S&P's assumptions came true, the county's bondholders would be repaid within a few months.

The affluent county, the home of Disneyland, got into trouble with risky bets on interest rates.

Orange County's former treasurer, Robert L. Citron, had for years earned big yields investing money for the county and 200 local agencies, school systems and cities. But Citron's bets on low interest rates came up losers in December 1994, when the county filed bankruptcy with $1.64 billion in debts.