The Virginia Resources Authority Tuesday expects to price $78 million of pooled financing revenue bonds for 18 local borrowers.
The VRA expects to sell $53.5 million of infrastructure revenue bonds, including $10.3 million of Build America Bonds, as senior-lien bonds supported by borrowers’ general obligation and revenue pledges and the state aid intercept program, which can divert state money due to the municipality if it misses a loan payment.
The intercept has never been called on, according to the VRA. The bonds are rated triple-A by Moody’s Investors Service and Standard & Poor’s.
The VRA will also price $24.5 million of state moral obligation bonds, including $4.7 million of BABs, supported by a junior lien on loan repayments and the state’s moral obligation pledge, which is available to replenish a reserve fund. They are rated Aa2 by Moody’s and AA by Standard & Poor’s.
Morgan Keegan & Co. and JPMorgan are lead underwriters, with Fidelity Capital Markets, M.R. Beal & Co., and Wells Fargo Securities rounding out the team. McGuireWoods LLP is bond counsel and Troutman Sanders LLP is representing the underwriters. Davenport & Co. and Strategic Solutions Center LLC are financial advisers.
Recently, the VRA worked out a deal to eliminate its exposure to its most troubled borrower, Virginia’s Southeastern Public Service Authority. The SPSA, a waste disposal authority and the VRA’s second-largest borrower, hit financial trouble amid the economic recession. In 2009, the VRA restructured some of its loans to buy the authority time to work out its debts.
In April, the SPSA completed the sale of a waste-to-energy plant to Wheelabrator Portsmouth Inc. and used the proceeds to redeem more than half of its outstanding debt. The SPSA will have $47 million outstanding with the VRA on June 1. The VRA has commitments from the SPSA’s eight municipal owners to support the outstanding debt.