LOS ANGELES — The Anaheim Public Financing Authority plans to price $265 million of lease revenue bonds Tuesday to fund an expansion of the Anaheim Convention Center.

The deal consists of $258 million of tax-exempt bonds maturing serially from 2015 to 2034, with a term bond in 2039 and 2046, as well as $7 million of taxable bonds maturing in 2015 and 2016.

Citi will run the books.

The proceeds will refund the 1992, 1993, 2002A and 2010 lease revenue bonds and provide $200 million to finance the expansion of the Anaheim Convention Center.

The bonds are rated AA-minus by Standard & Poor's and Fitch with a stable outlook.

City officials have been anticipating interest rates of roughly 4%, but it's dependent on the market, said Deborah Moreno, Anaheim's finance director.

California's 10th largest city, best-known as the home of Disneyland, has to remind investors that the city has a diverse economy that is not just based on tourism, Moreno said.

"We are a fairly built-up community, so the property tax base is fairly stable," Moreno said. 'We only experienced a modest decline in assessed valuation during the downtown."

Tourism is a major driver - the city sees 20 million visitors annually as a popular global destination, according to Moreno.

Lease payments on the convention center will be paid through the city's general fund, for an anticipated $409.6 million in debt payments, Moreno said.

A hotel room tax levied to pay for the expansion is expected to generate between $135.3 million and $231.6 million in revenue over 30 years beyond what is needed to make debt service payments.

Moreno discounts national reports in recent years that convention center business is on the decline.

"We have been a successful venue for a number of years," Moreno said. "We feel the expansion will help us to continue the positive momentum."

The city's current debt on past convention center expansions and other facilities is $84.8 million, according to a staff report produced by Moreno.

That doesn't included Disneyland Resort district improvement bonds, which are guaranteed by Disney.

The city is on track to have that debt paid off by 2023 freeing it from $16.8 million in annual debt service payments. The new debt will bring debt payments of a roughly equivalent amount of just less than $17 million.

The bonds include a debt service reserve fund at 50% of maximum annual debt service.

While the Fitch ratings report does not deem the convention center an essential asset, Moreno said during the road show that it is a "key asset with respect to the city's ability to generate revenue and is essential to the continued growth of tourism in the city."

Orrick is bond counsel. PFM is the financial advisor.

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