DALLAS — A $40 million sale of certificates of obligation by Dallas and a nearly $80 million issue of similar debt by Laredo lead the way this week in the Texas municipal market.

The Dallas City Council approved using the debt last week to buy 8.4 acres in downtown to build a hotel adjacent to the city’s convention center. Citi is lead manager for the negotiated sale. First Southwest Co. and Estrada Hinojosa & Co. Inc. are the city’s co-financial advisers.

Dallas’ general obligation debt carries underlying ratings of AA-plus from Standard & Poor’s and Aa1 from Moody’s Investors Service.

In South Texas, Laredo plans to issue about $78 million of certificates of obligation in two series at some point this week through a negotiated sale also led by Citi. Proceeds will fund various infrastructure improvements across the growing border community.

Last week, Moody’s upgraded its rating on Laredo’s GO debt to A1 from A2, citing the city’s strong tax-base growth and healthy economy. The higher rating applies to the current issue and about $210 million of parity debt outstanding.

Standard & Poor’s also raised its underlying rating on the credit to AA-minus from A-plus due to “the city’s good financial management and capital planning as well as strong general fund reserve.”

Fitch Ratings assigned an A-plus rating to the sale.

Laredo is the southern terminus of Interstate 35, which is a main freight corridor between the U.S. and Mexico, according to analysts.

The city’s current population of about 231,500 is up more than 31% since the 2000 Census. Its sister city across the Rio Grande, Nuevo Laredo, has a population closer to 300,000.

Further down the Rio Grande Valley, the Mission Economic Development Corp. is issuing $56.2 million of variable-rate demand solid-waste disposal revenue bonds Thursday.

The debt, which is subject to the alternative minimum tax, will be backed by a letter of credit issued by Bank of America NA. Proceeds will fund the Allied Waste North America Inc. project.

In the competitive market Thursday, the North Texas Municipal Water District plans to offer about $49.6 million of regional wastewater system revenue bonds. Insurance will be at the bidder’s option.

First Southwest is the financial adviser to the district, which carries underlying ratings of AA-plus from Standard & Poor’s and Aa3 from Moody’s.

Proceeds will fund expansion of a water-treatment plant in Mesquite, design of another plant expansion, and other improvements to the system. The bonds are secured with a first lien on pledged revenue of the system. Plano accounts for nearly half of the system’s revenue, according to analysts.

The district, which has 11 member cities, expects to issue another $30 million of regional wastewater system revenue bonds in June 2009.

A few smaller Texas school districts are planning to bring bank-qualified issues to market this week.

First Southwest is lead underwriter for about $5.9 million of revenue refunding bonds to be issued by the Gilmer Independent School District and $3.5 million of refunding bonds from the Mart Independent School District.

Gilmer ISD in East Texas serves about 2,300 students in four schools. The Mart school district in central Texas serves fewer than 600 students at three campuses.

The Buffalo Independent School District will offer $9 million of schoolhouse bonds this week through a negotiated sale led by Coastal Securities. The sale is the second from an $18 million authorization approved by voters in November 2006 for a new high school.

Business manager Jeannine Myers said the district put the bond package before voters at a time when the community was still in the running as a possible site for the FutureGen coal plant. Although Illinois was selected as the site for the plant, district officials still expect some enrollment growth and decided to build a new high school regardless. The final destination for the pioneering coal plant remains uncertain, as legislators battle in Washington, D.C.

The rural, central Texas district serves fewer than 800 students.

The Alief Independent School District will competitively issue nearly $9 million of unlimited tax school building bonds Tuesday. Coastal Securities Inc. is the financial adviser to the district and Vinson & Elkins LLP is bond counsel.

Proceeds will fund acquisitions of buses and land for future sites, as well as technology upgrades and improvements to existing campuses. Alief ISD will have about $67 million of debt authorized in 2003 but still unissued following this week’s sale.

The district oversees 42 schools with a total student population of about 47,700. Many of the schools are in urban areas, including the southwestern edges of Houston.

Most of the school bonds will come to market with the triple-A enhancement provided by the state’s Permanent School Fund.

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