Orange County Register

Orange County Treasurer-Tax Collector Chriss Street says he has averted a potential $50 million loss to the taxpayers by selling an investment early.

Street sold a $75 million structured investment vehicle packaged by Sigma Finance Corp. on Sept. 12. Yesterday the British company said it will halt trading and that it might appoint a receiver to wind down its holdings.

Sigma was due to mature on Oct. 30. Instead of waiting, Street sold it early for 91.5 cents on the dollar. But counting interest earned since the county purchased it, the county has made a profit, he said.

“We recognized that challenges for Sigma Finance were mounting and elected to sell the investment,” he said. Under current market conditions, Street added, the county could have lost $50 million on its investment.

The county bought Sigma in October 2006, while Street was assistant treasurer.

After taking office that December he nearly tripled the county’s stake in structured investment vehicles, which combine diverse debts such as mortgages, auto loans and credit card receivables into a single package. 

SIV’s fell into disfavor when the worldwide credit crisis erupted in August 2007. By then Street held more than $800 million in the complex securities.

Street’s heavy investment in SIV’s drew skepticism from fellow treasurers and led county supervisors to consider revoking his authority to invest county money.

One county-owned SIV, Whistlejacket, defaulted in February and went into a British receivership. That investment, with a face value of $80 million, is now marked down on the county’s books to $69 million. Street hopes to get the county’s money back from Whistlejacket’s receiver.

With the Sigma sale, the county now holds $560 million in SIV’s.

Here are some highlights from our past coverage of Street’s bets on structured investment vehicles:

• Credit crunch hits county investment pool
• O.C. investments shunned by others
• O.C. treasurer tripled stake in controversial investments
• County investment faces default
• Did county treasurer bet on a nag?
• British court ruling supports O.C.

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