BRADENTON, Fla. — Atlanta is planning to refinance $771.7 million of water and sewer revenue bonds in two transactions over the next two months for interest savings and to deal with an unhedged swap.

The City Council approved the bond resolution at its regular meeting on Monday.

The transactions will refund several series of existing bonds for the Department of Watershed Management. It will be the city's first appearance in the bond market with a major water and sewer system offering since 2009.

Part of the financing will be used to match an unhedged swap that would cost about $85.8 million to terminate as of July 9. The swap covering a notional amount of $328.7 million is with UBS AG.

"The objectives of the transaction are to reduce the overall cost of capital on Department of Watershed Management's debt and to make effective use of an existing un-hedged swap," Chief Financial Officer Jim Beard said in a document detailing the deals to the City Council.

Beard said that $771.7 million of Series 1999A, 2001A, and 2004 callable water and sewer bonds can be refunded.

About $326.7 million of refunding bonds would be sold as floating-rate notes or some other variable-rate security to match the unhedged swap amount. The remaining $444.9 million would be sold as fixed-rate bonds for interest savings.

"Interest costs [related to the swap] will be about $9 million lower per year on average after the refunding," Beard said in an interview Wednesday. "This transaction will give us the opportunity to address the swap that has been outstanding for several years now."

Pricing on the floating-rate notes is anticipated Aug. 27. Wells Fargo Securities will be the senior manager.

The remaining fixed-rate refunding bonds are expected to be sold Sept. 10 with Goldman, Sachs & Co. as senior manager.

First Southwest Co. and Grant & Associates are the city's financial advisors. Mohanty Gargiulo LLC is the swap advisor.

Hunton & Williams is Bond Counsel. Greenberg Traurig LLP and Riddle & Schwartz LLC are disclosure counsel.

Atlanta had about $3.1 billion of outstanding water and sewer revenue bonds as of June 30, 2012. The bonds are rated A1 by Moody's Investors Service and A by Fitch Ratings and Standard & Poor's.

The city was most recently in the market March 18, 2012 to sell $474.1 million of aviation revenue bonds.

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