NEW YORK (Reuters) ? Current bids for Refco?s futures brokerage business are likely to be around $1 billion, sources familiar with the bidding said yesterday. Refco, which filed for bankruptcy last month after an accounting scandal, said Friday that five bidders were vying for company assets.

Refco was to approve bids yesterday and will conduct an auction for the assets tomorrow, at which point current bids could climb higher. By Thursday, the company will submit winners to the bankruptcy court.

Refco bonds hovered around 77 cents on the dollar, their highest levels since before Refco filed for bankruptcy, as investors remained optimistic about the outcome of the auction.

?The anticipation is, people will bid against each other and drive the price up,? said Ron Bringewatt, head of research at the Seaport Group, a distressed debt brokerage in New York.

Suitors have not publicly discussed their offers so far.

Last month, before the current auction process had been put in place and before potential buyers had carefully examined the company?s assets, privately held Interactive Brokers Group said it would bid $858 million for the assets.

That topped a joint bid from the Dubai government?s investment arm and buyout firm Yucaipa Companies worth $828 million. But offers have generally risen as possible buyers have learned more about the company?s assets, a source said.

Alaron, a Chicago futures and options broker, had submitted a bid for Refco Inc.?s private client business, an Alaron spokesman said yesterday.

Because Alaron?s is only bidding for Refco?s private client business, its bid was much smaller than the figures mentioned last month for Refco?s entire futures business.

Man Group Plc, a London-based hedge fund company and broker, has also identified itself as one of the bidders.

The group said it had bid for some of Refco?s operations and assets, but did not provide details. In addition to Man and Alaron, sources close to the matter have told Reuters US private equity firm J.C. Flowers & Co. and US broker-dealer Interactive Brokers Group also submitted bids.

Refco plunged into bankruptcy after its chief executive, Phillip Bennett, was charged with securities fraud, which caused customers to abandon the company.