Illinois’s tollway agency is set to issue $400 million of tax-exempt bonds in the biggest sale from the state since lawmakers took steps to bolster the worst-funded U.S. state pension system.

The Illinois State Toll Highway Authority plans to offer the debt this week to refinance securities issued in 2005, offering documents show. The bonds are rated AA- by Standard & Poor’s, three steps below the top. In 2011, the agency embarked on a 15-year, $12 billion capital plan, of which about $5.1 billion will come from bonds, the documents show.

In December, legislators in the lowest-rated state passed pension measures designed to save $160 billion over 30 years. While the state’s relative borrowing costs fell 29 percent on a $350 million debt sale in December, a retiree group has since sued to block the plan.

“We anticipate investors will respond favorably” to the bonds, said Mike Colsch, finance chief for the Downers Grove, Illinois-based agency, in an e-mail. The debt benefits from a dedicated revenue stream, he said.

The authority targets savings of at least $30 million from the refunding, Wendy Abrams, a spokeswoman, said in an e-mail. It expects to issue as much as $500 million of debt for new projects in February or March for its capital program, she said.

O’Hare Travel

The authority operates 286 miles of roads in the northern part of the state, and supports itself through fees paid by drivers. The capital program will finance work such as rebuilding and extending tollways connecting to Chicago O’Hare International Airport.

The tollway bonds, with an S&P rating three levels above the state’s A-, mature from 2019 to 2022. The agency joins issuers offering about $5.1 billion of long-term bonds this week.

Previously issued debt due in January 2027 traded Jan. 23 at an average yield of 3.85 percent, the lowest since June, data compiled by Bloomberg show.

The state plans to sell $1 billion of tax-free general obligations next week. Illinois debt has outpaced other states in the past three months amid a rally in the $3.7 trillion municipal market. The securities have gained about 2.9 percent, the most among 27 states tracked by S&P.