WASHINGTON — The Virginia College Building Authority on Wednesday will sell about $377 million of bonds in a competitive sale that the commonwealth’s financial officers think will be met with strong market demand.
The VCBA will sell the bonds as part of its 21st Century College and Equipment Program, formed in 1999 from two existing programs funding higher education in the commonwealth. The securities will be secured by the Virginia General Assembly’s appropriations to the VCBA, which has no independent taxing power.
The authority is composed of the state treasurer, the comptroller, the director of the department of planning and budget, the executive director of the State Council of Higher Education for Virginia, and seven additional members appointed by the governor. In addition to supporting capital projects and equipment for the commonwealth’s public institutions of higher learning, the VCBA provides a conduit financing mechanism for private, nonprofit schools.
Evelyn Whitley, Virginia director of debt management, said ratings are expected imminently, but that the bonds should receive the same ratings they have been given from all three major agencies in past issuances: AA-plus from Fitch Ratings, Aa1 from Moody’s Investors Service, and AA-plus from Standard and Poor’s.
In rating the last VCBA educational revenue bond issue, Fitch noted the commonwealth’s triple-A general obligation rating and its “conservative approach to financial operations.”
Kutak Rock LLP will serve as bond counsel on the deal, while the financial advisor will be First Southwest Co.
Whitley said the authority has typically used competitive sales rather than negotiated sales, and that she expects the offering will have strong support from the market.
The VCBA deal is the largest competitive offering scheduled for the final week of November, and market participants said last week that demand for munis would likely remain very strong given their attractiveness relative to Treasuries.
“We think it’s going to be a good market that we’re jumping into this week, Whitley said. “We don’t see anything that would hinder us. Normally, we’ve been very happy.”
Closing on the bonds is scheduled for Dec. 13.
