BIGGEST BOND ISSUES

Virginia Housing Development Authority
Richmond
Amount: $1.4 billion

A robust housing market kept the Virginia Housing Development Authority busy last year. The demand for VHDA-backed loans to home buyers outpaced the authority's ability to issue tax-exempt bonds to fund them.

As a result, the VHDA sold more than $1 billion in taxable, mortgage revenue bonds, which are more expensive to issue than the tax-exempt variety. The two largest issues consisted of $832 million in commonwealth mortgage bonds that were sold in January 1998 and October 1998. These AA+ bonds have a floating rate of return, but the VHDA reserves the right to convert them to a fixed rate to raise additional money.

Lehman Brothers was the underwriter for the January issue and BT Alex. Brown was the underwriter for the October bond issue. Hawkins Delafield & Wood of New York City served as bond counsel and Christian & Barton of Richmond served as outside counsel.

CSX Corp.
Richmond
Amount: $740.2 million

Details: The company issued three series of notes in 1998. More than $394 million was raised from an October issue of unsecured notes, which carried an interest rate of 6.25 percent and a maturity date of Oct. 15, 2008. Almost $346 million was raised from the sale of two series of medium-term notes in November. One series of notes had a 5.85 percent interest rate and matured in 2003, while the other had a 6.8 percent rate and a maturity date of Dec. 1, 2028. The S&P rating for all three issues is BBB.

Players: Salomon Smith Barney and Morgan Stanley Dean Witter managed the October bond issue, while Chase Securities; Goldman, Sachs & Co.; and Merrill Lynch & Co. managed the pair of November issues. McGuire, Woods, Battle & Boothe served as legal counsel.

Capital One Bank
Falls Church
Amount: $655 million

Details: Three issues of corporate bonds were sold in February, April and May 1998. The February issue carried an interest rate of 6.38 percent and a maturity of February 2003. The April bonds had an interest rate of 6.7 percent and a maturity of February 2008, and the May issue had an interest rate of 6.2 percent and a maturity of June 2001.

Players: J.P. Morgan Securities, Merrill Lynch & Co. and Salomon Smith Barney served as a lead underwriter.

Global TeleSystems Group
McLean
Amount: $552.6 million

Details: Upon its February 1998 initial public offering, the company issued senior notes with an interest rate of 9.88 percent. The bond issue raised an additional $100.5 million. In July, the company sold convertible senior subordinated debentures with an interest rate of 5.75 percent, raising $452.1 million.

Players: Donaldson, Lufkin & Jenrette Securities and Merrill Lynch & Co. served as co-lead managers for both bond issues. Shearman & Sterling was the legal counsel for Global TeleSystems and Ernst & Young was the auditor.

US Airways Group
Arlington
Amount: $447.7 million

Details: In December 1998, the company issued two classes of pass-through trust certificates with interest rates of 6.85 percent and 7.35 percent. The proceeds were used to purchase new aircraft. The S&P ratings of the certificates were AA- and A.

Players: Morgan Stanley Dean Witter was the lead underwriter. Co-managers were CS First Boston, Lehman Brothers and Salomon Smith Barney. Skadden, Arps, Slate, Meagher & Flom was the company's legal counsel and KPMG Peat Marwick audited the bond issue.

Pocahontas Parkway Association
Richmond
Amount: $353.8 million

Details: As part of a proposal to develop, finance and build the Route 895 connector, VDOT created a nonprofit corporation called the Pocahontas Parkway Association to issue a trio of nonrecourse toll revenue bonds last June with an interest rate of 5.8 percent. The bonds are tax-exempt and secured by toll revenues as well as a $5 million contractor loan note funded by the private joint venture. The S&P rating of the bonds is BBB-.

Players: Bear, Stearns managed the bond issues and Williams, Mullen, Christian & Dobbins served as legal counsel.

AES
Arlington
Amount: $350 million

Details: The company issued two sets of bonds in 1998 to fund its acquisition of various companies. An August issue of junior subordinated bonds raised $150 million, while a December issue of senior bonds raised $200 million. The bonds earn 4.5 percent and 8 percent respectively.

Players: The lead underwriters for the August bond issue were J.P. Morgan Securities and Salomon Smith Barney. Goldman, Sachs & Co. served as the lead manager of the December bond issue. AES used Davis, Polk & Wardwell as its legal counsel and Deloitte & Touche as auditor.

Metropolitan Washington Airports
Alexandria
Amount: $300 million

Details: The authority issued two types of bonds in June to fund ongoing construction projects. The tax-exempt bonds carry an average interest rate of 5.12 percent and mature in 2028.

Players: Chapman & Co., First Union Capital Markets and Salomon Smith Barney were the senior managers of the bond issue. Hunton & Williams and Lewis Munday Wilder & Gregory served as the authority's legal counsel, while PricewaterhouseCoopers audited the bond issue.

AvalonBay Communities
Alexandria
Amount: $247.6 million

Details: The company issued senior unsecured notes in July with an average maturity of seven years and an interest rate of 6.86 percent. Proceeds will go toward paying off a $600 million unsecured credit facility, which is used to fund the acquisition and development of apartment communities.

Players: PaineWebber served as the lead underwriter. Goodwin, Procter & Hoar served as legal councel.

United Dominion Realty Trust
Richmond
Amount: $150 million

Details: Because of unstable market conditions last November, the company had to issue these short-term notes at a high interest rate of 8.13 percent. The proceeds were needed to close the $800 million acquisition of American Apartment Communities II and to pay down debt. The notes have a maturity date of Nov. 15, 2000.

Players: Morgan Stanley Dean Witter served as the lead underwriter. In-house counsel and auditors were used for the bond issue.

This report was compiled by Charles Gerena using information provided by Craigie Inc. and Scott & Stringfellow.