Federal regulators on Friday seized California's Columbia Savings and Loan Association, the industry's biggest speculator in junk bonds.

Columbia, of Beverly Hills, worked closely with Michael Milken, Drexel Burnham Lambert Inc.'s junk bond chief, to accumulate a multibillion portfolio of the risky securities far larger than that of any other thrift institution.Analysts have estimated the taxpayer's ultimate price tag for protecting Columbia's depositors at around $1 billion, placing it among the dozen or so costliest S&L failures.

Its former chief executive, Thomas Spiegel, was forced to resign in December 1989. Regulators later sought a record $24 million from him for squandering deposits on luxury condominiums, trips to Europe, a gun collection and other luxuries.

At the end of 1990, Columbia had junk bonds worth approximately $2.5 billion, which it had been trying to sell since new management replaced Spiegel. The bonds were originally purchased for more than $4 billion.

The takeover, ordered by the Treasury Department's Office of Thrift Supervision, brings the government's junk bond holdings to more than $5 billion. That makes the government the largest single junk owner in the $200 billion-plus market.