Vermont plans to sell $10 million of special obligation transportation infrastructure bonds to fund bridge reconstruction and roadway reconfiguration projects.

The bonds will be sold competitively on Tuesday.

The sale comes after Standard & Poor's upgraded Vermont's special infrastructure bonds to AA-plus from AA.

The upgrade applies to Tuesday's bonds.

"The upgrade reflects strengthened debt service coverage," said analyst Henry Henderson.

The agency reported that state officials have indicated an intention to limit debt issuance to maintain coverage at no less than three times, which is viewed as a strong level.

Moody's Investors Service has assigned a Aa2 rating to the bonds, also citing healthy debt service coverage, which is provided by pledged revenues consisting of assessments on motor vehicle and diesel fuel.

Fitch Ratings assigned an equivalent AA rating, listing bondholders' first lien on dedicated fuel assessments as a key rating driver.

The bonds will mature from 2013 through 2032, and will be subject to redemption.

Edwards Wildman Palmer LLP is bond counsel and Public Resources Advisor Group is financial advisor.

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