The Virginia Resources Authority issued $175.1 million in bonds to finance an initiative that supports statewide capital improvements.
The authority sold $121.5 million in infrastructure revenue bonds and $53.6 million in moral obligation revenue bonds. The infrastructure revenue bonds mature between 2024 and 2054, yielding between 2.81% and 4.175%. The moral obligation revenue bonds also mature between 2024 and 2054, yielding between 2.87% and 4.22%.
The infrastructure revenue bonds received a rating of Aaa from Moody’s Investors Service and AAA from S&P Global Ratings. The moral obligation revenue bonds received a rating of Aa1 from Moody’s and AA from S&P.
The authority will use the bond proceeds to purchase local government debt that funds capital improvements across Virginia.
“The rating reflects our view of the program’s very strong market position, extremely strong financial risk score, extremely strong operating performance, and strong policies including a thorough process of loan origination and monitoring,” S&P analyst Lisa Schroeer said in a press release.
The Virginia Resources Authority was founded in 1984 to finance capital projects by loaning bond proceeds to municipalities in the state. The “moral” obligation refers to Virginia’s commitment to maintaining a sufficient balance to secure the bonds.
The bonds are limited obligations of the authority, payable by loans it makes to more than 100 municipalities. The authority sold an additional $200 million in bonds in May.
BofA Securities, Inc served as underwriter on the issuance, purchasing the bonds for almost $190 million. The price reflected a premium of almost $15 million. Davenport & Company LLC acted as financial advisor.