McDonnell pushes sale of bonds to Virginia investors

Gov. Bob McDonnell announced today the upcoming sale of approximately $227 million in Infrastructure and State Revenue Bonds to be issued by the Virginia Resources Authority to finance and refinance improvements to certain water, wastewater, and other infrastructure improvement projects for 17 local governments and local government authorities.

The bonds will include tax-exempt and taxable bonds and are scheduled to be sold on Nov. 1 and Nov. 2. The VRA will offer the bonds first to Virginia retail investors.  Following the retail order period on Nov. 1, any unsold bonds will be offered to large institutional investors on Nov. 2.  By utilizing this approach, the Virginia Resources Authority is providing Virginia investors with the opportunity first to buy bonds on either a tax-exempt or taxable basis that often are sold to larger, institutional investors.

“I am pleased to offer these bonds to Virginia citizens who have the most to gain from investing in the Commonwealth’s programs and improvements to our environment,” McDonnell said. “Particularly in these tough economic times it is important to provide our citizens with an opportunity to invest in safe and secure revenue bonds issued by the Virginia Resources Authority.”

Stephanie Hamlett, executive director of the VRA, added, “I am excited that citizens of the Commonwealth will have the opportunity to purchase bonds that are issued to finance projects that can benefit them but also provide improvements to our environment.  The VRA bond financing programs are unique in that the Commonwealth of Virginia and the local governments both provide credit enhancements to the financing.”

The VRA’s Virginia Pooled Financing Program consists of Infrastructure Revenue Bonds and State Revenue Bonds.  The Infrastructure Revenue Bonds currently carry the highest rating category of Aaa and AAA by Moody’s Investors Service and Standard & Poor’s.  The State Revenue Bonds are rated Aa2 and AA by Moody’s Investors Service and Standard & Poor’s. Revenue from usage fees and other local government revenue sources will be used to pay principal and interest on the bonds.  Local governments will also make additional pledges to provide additional security in the event that fee revenue is insufficient to make such payments.

The tax-exempt sale will be managed by Morgan Keegan & Company, Inc., J.P. Morgan, Bank of America Merrill Lynch, BB&T Capital Markets, and Fidelity Capital Markets.  The Taxable portion of the transaction will be managed by Citigroup Global Markets, Loop Capital Markets, and Morgan Stanley.