VRA Deals for Clean Water

The Virginia Resources Authority expects to price $109.9 million of new-money clean water bonds next week.

The state's clean water revolving loan fund allows local governments to borrow at below-market rates for water quality improvements. A retail period for the bonds is scheduled for Tuesday and institutional pricing will be on Wednesday. Proceeds from the deal will finance eight projects for five borrowers.

Triple-A ratings are expected to be affirmed by Moody's Investors Service, Standard & Poor's, and Fitch Ratings, said VRA executive director Sheryl Bailey. She said a decision whether or not to issue a portion of the deal as Build America Bonds had not been reached.

The VRA also expects to issue $8.3 million of clean water state match bonds needed to receive about $40 million of federal capitalization grants for the clean water program. To receive the federal funding, the state needs to match 20% of the total $40 million. This deal will be the first time the authority has issued bonds to provide the state's matching funds.

The state matching bonds are rated MIG1 by Moody's. Standard & Poor's and Fitch are expected to rate the bonds A-1 plus and F-1 plus, respectively.

Bank of America Merrill Lynch and Siebert Brandford Shank & Co. are co-senior managers with Citi, Fidelity Capital Markets, and Morgan Keegan & Co. as co-underwriters. McGuireWoods LLP is bond counsel, and Davenport & Co. and Strategic Solutions Center LLC are financial advisers.

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