Build America Bond program expected to grow; Illinois plans $1.44 billion G.O. refunding bonds

By Cristal Cody

Tupelo, Miss., Feb. 12 - Demand for municipals remains strong and sales of Build America Bonds are expected to reach as high as $150 billion this year, a source said Friday.

Meanwhile, the State of Illinois intends to sell $1.435 billion in general obligation refunding bonds, according to a preliminary official statement.

Also coming up, the State of New Mexico expects to price $249 million in severance tax bonds through a competitive sale on Tuesday as a way to finance public education projects, according to notices of the bond sales.

Illinois to price $1.44 billion

Returning to the Illinois sale, the state plans to price the series February 2010 bonds (A2/A+/A) through a negotiated sale led by senior managers Morgan Stanley and Citigroup Global Markets Inc., according to a preliminary official statement released late Thursday.

The bonds have serial maturities from 2011 through 2025.

The proceeds will be used to refund all or a portion of maturities of outstanding G.O. bonds of the state and to purchase U.S. Treasury obligations to provide for the refunding.

New Mexico details sale

Elsewhere on Friday, New Mexico said its severance tax bonds include $149 million in series 2010A severance tax bonds and $100 million in series 2010B supplemental severance tax bonds. Both tranches have serial maturities from 2011 through 2020.

Fiscal Strategies Group, Inc. and Public Resources Advisory Group are the financial advisers.

The proceeds will be used to finance public education projects.

Indiana to sell purchase funding bonds

Meanwhile, the Indiana Bond Bank announced plans to price $55 million in Common School Fund Advancement purchase funding bonds.

The series 2010A taxable bonds will be sold to purchase advancement agreements on the right to make deductions from school tuition support payments and to repay some advancements made to Indiana school corporations for the construction of school facilities, according to a preliminary official statement.

Raymond James & Associates, Inc. is the senior manager of the negotiated sale.

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