<p>Merrill Lynch, which fell from favor in California for its central role in Orange County's historic 1994 bankruptcy, has repaired its image in the state and is now a leading competitor for the job of financing California's unprecedented debt.</p>
<p>Today, Merrill Lynch ranks second among the banks selling long-term bonds in California. It assisted with last year's $11 billion in state borrowing and an earlier deal to help the struggling Los Angeles Unified School District.</p>