The board of New York’s Metropolitan Transportation Authority on Wednesday authorized, without debate, the negotiated sale of up to $500 million of tax-exempt Series 2011A transportation revenue bonds.

Proceeds will fund capital projects for transit, bus, and commuter systems.

Retail and institutional pricing is scheduled for July 11 and 12, respectively, according to the authority, whose finance committee approved the sale on Monday.

The MTA expects to close the deal July 20, according to a spokesman, who added that a preliminary official statement is due next week.

Roughly $400 million of the debt will be fixed-rate debt and $100 million will be variable-rate demand bonds. Bank of America Merrill Lynch is the lead underwriter.

No swaps are involved. The VRDBs will be supported by a letter of credit from BofA Merrill.

The MTA’s transportation revenue bonds have an A2 rating from Moody’s Investors Service, an A from Standard & Poor’s and an A-plus from Fitch Ratings. Fitch has assigned a negative outlook.

The board also approved a finance committee recommendation to move a swap from Citigroup to a more highly rated counterparty in connection with $350 million of dedicated tax fund variable-rate refunding bonds Series 2008A, the remarketing of which began last week.

Citi, according to a finance committee statement, wants to exit the agreement and is willing to assume mark-to-market payment to a new counterparty.

“This action would effectively transfer the risk borne by Citigroup to the new counterparty,” the committee said. Effective June 16, the mark-to-market value of this transaction was negative $39.8 million.

Standard & Poor’s rates the bonds A-plus/A-1, while Fitch rates them AA-plus/F1 with a negative outlook. The ratings reflect the underlying credit facility of the bonds, not the dedicated tax fund, according to an MTA official.

In real estate matters, the authority board on Wednesday approved a 10-year lease extension with Grace Holmes Inc., which does business as men’s clothing retailer J. Crew, for ground-floor space at its 347 Madison Ave. headquarters.

The MTA, the largest transit system in the United States, is looking to sell three Manhattan buildings it owns, hoping it can leverage their proximity to Grand Central Terminal.

Officials plan to vacate the three Madison Avenue buildings within two to three years and relocate employees to lower Manhattan and North White Plains.

The MTA’s real estate division had recommended J. Crew’s bid, valued at $12.6 million, over an $8.2 million offer from BankUnited of Miami Lakes, Fla., which had proposed a bank branch for the space. J. Crew now pays $950,000 per year, or about $136 per square foot, for the premises.

The move “will allow the MTA to continue to derive income from the premises, at a significantly higher rate than it does now, without adversely affecting its ability to dispose of the building for redevelopment,” the agency’s real estate department said in a statement.

Wednesday marked the initial meetings for new board members Jonathan Ballan, who heads the New York public finance practice group at law firm Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC, and Fernando Ferrer, former Bronx borough president and New York City mayoral candidate.

The next meetings of the finance committee and full board are scheduled for July 25 and 27, respectively. The MTA next month is expected to release its preliminary budget for 2012.

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