Los Angeles Unified School District said Thursday that it plans to sell as much as $1.6 billion of tax-exempt bonds in an effort to refinance higher-interest debt.

The sale is set for the week of Jan. 8 and will be managed by Merrill Lynch & Co. The LAUSD is the second-largest school district in the country with about 708,000 students.

The district sold $575 million-worth of bonds in October through another refunding to replace older securities. Yields on those bonds ranged from 3.41 percent payable in 2007 to 4.37 percent payable in 2027.