New Jersey Economic Development sells $400 million in school notes; Michigan DOT bonds ahead

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, June 15 - The week was already looking stronger Monday with yields dropping and trading volume picking up.

"It's been a strong day, especially for a Monday," one trader said.

"It could be the calm before the storm this week. We've got a lot moving in secondary, but that's because primary was very light today. On the whole, yields are probably down a basis point or two."

Looking to Monday's light primary action, the New Jersey Economic Development Authority brought to market $400 million in series 2009A school facilities construction notes, said Thomas Bell, spokesman for the state treasurer's office.

The notes (MIG 1/SP-1+/) are due June 18, 2010 and priced to yield 0.495%, said Bell.

J.P. Morgan Securities Inc., Citigroup Global Markets Inc. and Goldman, Sachs & Co. all took pieces of the competitive offering. Powell Capital Markets Inc. was the financial adviser.

Proceeds will be used to fund school construction projects throughout the state.

Meanwhile, primary action for the remainder of the week is set to be strong yet again. Guy LeBas, chief fixed income strategist with Janney Montgomery Scott LLC, said he had seen about $8.5 billion on the sales calendar.

Heading up that action is a $1 billion sale from Dallas Area Rapid Transit. Also among that activity is a $750 million offering from the Port Authority of New York and New Jersey.

Michigan DOT sale

Also this week, the State of Michigan is scheduled to sell $280 million in series 2009 grant anticipation notes, said a preliminary official statement. The bonds will be sold for the Michigan Department of Transportation.

The bonds will be sold through senior managers Merrill Lynch & Co. Inc. and Citigroup.

The sale includes series 2009A tax-exempt bonds and series 2009B Build America Bonds, but the exact breakdown has not yet been determined.

The series 2009A bonds are due 2024 to 2027, and the Build America Bonds are due 2024 to 2027.

Proceeds will be used to fund transportation infrastructure projects.

Indiana Bond Bank sale

The Indiana Bond Bank announced it will offer $165 million in series 2009A midyear funding program notes (MIG 1/SP-1+/), according to Dan Huge, executive director.

The notes are expected to price Thursday at "well under 1%," Huge said.

JPMorgan will act as underwriter for the negotiated bonds, which will mature on Jan. 6, 2010.

Proceeds will be collected by the bank and distributed to "85 plus" local governments and entities that can show a cash flow shortfall, Huge said.

The Indiana Bond Bank is located in Indianapolis.

U of Missouri deal

Also coming on Thursday, the Curators of the University of Missouri plans to sell $125 million in series FY 2009-2010A capital projects notes on Thursday, said a preliminary official statement.

The notes (MIG 1/SP-1+/) will be sold on a competitive basis with Commerce Bank NA as the financial adviser.

The notes are due June 30, 2010.

Proceeds will be used to fund small construction projects as well as the purchase of library books.

The university is based in Columbia, Mo.

June 23 sales stack up

In other upcoming sales, the State of New Mexico plans to price $218.45 million in series 2009A severance tax bonds June 23, according to a preliminary official statement.

The bonds will be sold on a competitive basis with Fiscal Strategies Group Inc. as the financial adviser.

The bonds are due 2010 to 2019.

Proceeds will be used to finance some capital projects as well as refund the state's series 2003A bonds.

Also, the City of San Diego is set to sell $124 million in series 2009-10 tax and revenue anticipation notes, said a preliminary official statement. The sale is expected to take place during the week of June 22.

The sale includes $18.6 million in series 2009-10A notes, $55.795 million in series 2009-10B notes and $49.605 million in series 2009-10C notes.

The notes (MIG 1/SP-1/F1+) will be sold through senior manager Barclays Capital.

The series 2009-10A notes are due Dec. 31, 2009; the 2009-10B notes are due Jan. 29, 2010; and the 2009-10C notes are due April 30, 2010.

Proceeds will be used to pay for capital expenditures.

Bring on the rum

Looking ahead, the Virgin Islands Public Finance Authority is gearing up to sell $250 million in series 2009A subordinate revenue bonds to fund the construction of a new rum production facility, said a preliminary official statement.

The bonds will be sold through lead managers JPMorgan and Citigroup.

The maturities have not yet been set.

Proceeds will be used to make a loan to the government to provide a grant to Diageo USVI Inc. for the construction, acquisition and equipment of the rum facility.

Port of Seattle sale

Also coming up, the Port of Seattle plans to sell $310.265 million in series 2009 revenue and refunding bonds, said a preliminary official statement.

The sale includes series 2009A-1 revenue bonds, series 2009A-2 revenue bonds, series 2009A-3 refunding revenue bonds, series 2009B-1 taxable revenue bonds and series 2009B-2 taxable revenue bonds.

The bonds (Aa2/AA-/AA) will be sold through senior manager Barclays Capital.

The maturities have not yet been set.

Proceeds will be used to refund the port's series 1998A bonds.

Secondary picks up

As the week got under way, a trader said volume picked up after a slump last week. The light primary activity meant better secondary activity.

Among the trading action Monday was Puerto Rico Sales Tax Financing Corp.'s series 2009A first subordinated bonds. The 5.5% 2028 bonds were seen at 5.7% Monday. The 6% 2042s were seen at 6.035%, and the 5% 2039s were seen at 4.7%.

Elsewhere, Virginia Beach's series 2009B public improvement refunding bonds were trading. The 5% 2016s were moving at 2.9%.

Also, the Kansas Development Finance Authority's series 2009 hospital revenue bonds sold for Adventist Health were moving. The 5.75% 2034 bonds were seen at 5.825%.

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