The District of Columbia expects to sell $270 million of income tax revenue refunding bonds tomorrow.

The income tax bonds retain the same ratings that were issued in March for the district’s first use of this debt structure. The Series 2009C bonds are rated Aa2 by Moody’s Investors Service, AAA by Standard & Poor’s, and AA by Fitch Ratings. The agencies also affirmed their ratings on $800 million of income tax revenue bonds issued in March.

The bonds will refund general obligation debt issued in 1999 and mature between two and 19 years.

The income tax bonds carry a higher rating than the district’s GO debt. Bondholders have a first lien on available income tax revenues superior to the district’s GOs and notes.

The district’s chief financial officer, Natwar M. Gandhi, trumpeted the district’s credit quality as larger issuers across the country have been downgraded or placed on a negative outlook by rating agencies.

The district has not remained immune to the economic recession dragging down municipal revenues. According to the most recent estimates from June 22, revenues for fiscal 2009 will be 3.8% lower than the February estimate and 3.0% lower for fiscal 2010. For the first time in years, Gandhi’s revenue estimates for a fiscal year have declined. Typically, the estimates increase as the fiscal year progresses.

Barclays Capital will lead a team of 12 underwriters. Citi, Siebert Brandford Shank & Co., Goldman, Sachs & Co., JPMorgan, Loop Capital Markets LLC, Merrill Lynch & Co., Morgan Stanley, M.R. Beal & Co., Raymond James & Associates Inc., RBC Capital Markets, and Wells Fargo Securities will be co-underwriters.

Bryant Miller Olive PC will be bond counsel. Hawkins Delafield & Wood LLP will be the district’s disclosure counsel. The underwriters will be represented by Hogan & Hartson LLP and Graves & Horton LLC.

Philadelphia-based Phoenix Capital Partners LLP and New York-based Public Resources Advisory Group will be financial advisers.

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