DALLAS — A general obligation sale of water bonds by the state and three issues from North Texas communities lead the way this week in the Lone Star state.

Texas will offer $115.2 million of GO debt for its water infrastructure fund at some point this week through the Texas Water Development Board. The negotiated sale will be led by Citi.

Fitch Ratings assigned an AA-plus underlying rating to the sale and said the outlook is stable. Analysts said the state’s GO rating reflects low debt and conservative financial operations and an expanding and diversifying economy.

Proceeds from the bonds are the first for the water infrastructure fund under a $459 million authorization to make loans to participating local subdivisions for water projects, according to Fitch.

Moody’s Investors Service assigned its Aa1 rating to the sale and Standard & Poor’s assigned an AA rating..

Carrollton-Farmer’s Branch Independent School District plans to issue about $58.9 million of unlimited-tax school building and refunding bonds in the competitive market Thursday.

Insurance for the bonds, which are structured as serials with final maturity in 2033 will be at the bidder’s option.

Mark Hyatt, assistant superintendent for support services, said the district was planning the new-money issuance at this time and decided to add the refunding component when it determined savings of 3% to 3.5% could be achieved.

First Southwest Co. is the financial adviser to the North Texas district and Fulbright & Jaworski LLP is bond counsel.

Roughly half of the issue is a refunding of Series 1998 debt, and new-money proceeds will fund technology upgrades and renovations to existing facilities. Following the sale, the district will have about $70.9 million remaining from a 2003 authorization of $300.2 million. Officials don’t plan to issue additional debt within the next year.

Standard & Poor’s assigned an AA underlying rating to the bonds, which also are backed by the state’s triple-A rated Permanent School Fund.

Analysts said the rating reflects the district’s “deep, diversified economic and employment base, strong wealth and income levels, and good financial management practices and very strong reserves.”

The district ended fiscal 2007 with a general-fund surplus of $8 million, pushing the unreserved general fund balance to $60.5 million. The assessed value of the district averaged 2% annual growth the past five years to $15 billion for fiscal 2008, according to analysts.

The school system, which serves an enrollment of about 26,500 at 39 campuses, includes nearly all of Carrollton, about 70% of Farmer’s Branch, as well as parts of Addison, Coppell, and Dallas.

Moody’s rates the district’s underlying credit at Aa2.

McKinney is bringing a three-tranche issue worth about $48.6 million to the competitive market Tuesday. Insurance will be at bidder’s option.

The suburban town about 30 miles north of Dallas plans to offer $24.3 million of GO bonds, $11.4 million of waterworks and sewer system revenue bonds, and $12.9 million of tax and limited pledge waterworks and sewer system revenue certificates of obligation.

Southwest Securities Inc. is the city’s financial adviser and Fulbright & Jaworski LLP is bond counsel.

Moody’s assigned its Aa3 underlying rating to the water and sewer revenue bonds and an Aa2 rating to the GO bonds and COs. Analysts also affirmed the Aa2 rating on the city’s $165.9 million of parity debt outstanding.

Standard & Poor’s upgraded its rating on the city’s water and sewer debt to AA-plus from AA due to an expanding customer base and historically good debt-service coverage. The agency also raised the rating on the GO credit at AA-plus from AA, citing the city’s “continued economic expansion and management’s maintenance of solid reserve levels despite significant growth pressures.”

In tandem with most of the suburbs north of Dallas, McKinney has experienced a flood of new residents this decade. The current population of nearly 115,000 is more than double the 2000 Census tally of about 54,400.

Richardson Independent School District is bringing $35 million of unlimited tax school building bonds to market this week on the heels of an upgrade to AA-plus from AA by Standard & Poor’s.

Analysts said the upgrade reflects the “long-term trend of strong financial operations despite state funding constraints, resulting in a very strong general fund position.”

RBC Capital Markets is lead manager for the negotiated sale. The underwriting syndicate also includes Banc of America Securities LLC, Morgan Keegan & Co., and Southwest Securities.

First Southwest is the financial adviser to the city and Vinson & Elkins LLP serves as bond counsel.

The Series 2008 bonds, which also come to market with the triple-A wrap provided by the state’s PSF, are structured as serials reaching final maturity in 2033.

Despite nearly complete residential development in the city, the school district’s taxable-assessed value managed to climb 10% the past five years to $17.32 billion for fiscal 2008.



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