DALLAS - Risk-averse investors will get a chance to load up on $257 million of natural triple-A state bonds when the Texas Water Development Board opens its retail order period today.

Institutional orders will be taken tomorrow in the negotiated deal led by Merrill Lynch & Co. and Jefferies & Co. with First Southwest Co. as financial adviser. McCall Parkhurst & Horton serves as bond counsel.

All three rating agencies have affirmed the triple-A credit of the issue, which includes $224.6 million of revolving fund revenue bonds and $32.8 million of refunding revenue bonds, both with subordinate liens.

Jeffrey Timlin, portfolio manager and vice president of Sage Advisory Services, expects strong orders for the debt.

"I still see good flows coming into the municipal market," he said Friday. "Those types of deals will still be well received."

The rally in the stock market implies a level of confidence in the economy that could be beneficial for munis, which have also rallied since last October, according to Timlin.

"In normal times, stocks would generally pull money away from bonds," he said. "With the rally in the equity markets being as shallow as it has been, it hasn't really sucked money out of fixed income."

The strength and stability of the TWDB's bonds is based in large part on the local utilities that borrow from the board's revolving fund, analysts said.

The board had about $2.7 billion of political subdivision bonds outstanding as of June that were backed by nearly $1.6 billion of state revolving loan fund debt. The board buys the political subdivision bonds with state-match and revenue bonds, federal capitalization grants, and surplus cash flows from the program.

Loans to Houston, which accounted for 40% of the pool at the outset, account for about 26.5% of the total portfolio now.

"We believe the portfolio's credit profile continues to strengthen, as evidenced by the lessening concentration of uninsured Houston loans, and the underlying credit quality of the remainder of the portfolio," Standard & Poor's analysts said.

The TWDB is a steady issuer of debt in Texas, with $153 million sold in February and $258 million of revenue bonds offered in June 2008, a sum nearly identical to this week's issue.

Voters approved a state constitutional amendment providing $2 billion of bonds for water development on Nov. 6, 2001. In November 2007, voters approved another $250 million for loans to impoverished areas of the state for water projects.

"As of today, the TWDB has sufficient bonding authority to address water and wastewater needs for several years to come," the board noted earlier this year. "However, based on the demand anticipated for new water supply project funding, additional bond authorization will be needed in the near future."

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