Muni market eases ahead of full calendar; University of Missouri sells $125 million notes

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, June 18 -- The municipal market was "softer in spots" Thursday, but a general wait-and-see attitude held sway and allowed for investors to be distracted by the U.S. Open being played on Long Island, a senior trader said.

Cash remained available on the sidelines even as municipal bond funds saw better inflows, he said, but there will not likely be any real leadership until "we get more direction from the payroll number."

Market data has driven the Treasury market. That data has, in turn, driven the municipal market.

"The little dog found the big dog and just followed it all the way," he said.

"We may be setting a new range on the 10-year [Treasury note, so near-term] munis are going to be a little bipolar."

The California general obligation bonds have been a popular buy for some.

"They've gotten cheaper every day for a month," the trader said.

"Maybe in the long run there's some value there, [but in the near term] you're just jumping in front of a train."

Meanwhile, during Thursday's lighter day for new issues, the Curators of the University of Missouri priced $125 million in series FY 2009-2010A capital project notes, said a pricing sheet released by a sellside source.

The notes (MIG 1/SP-1+/), which are due June 30, 2010, were sold on a competitive basis with Citigroup Global Markets Inc. as the winner. The true interest cost came in at 0.39036%. The coupon came in at 2%.

There were five bidders for the deal.

Commerce Bank N.A. was the financial adviser.

Proceeds will be used to fund small construction projects and purchase library books.

Dasny deal ahead

Moving to an extensive calendar for the upcoming week, the Dormitory Authority of the State of New York is expected to price $800 million in series 2009B state personal income tax bonds Tuesday, said a calendar of sales.

The bonds (/AAA/AA) will be sold on a negotiated basis with J.P. Morgan Securities Inc. as the senior manager.

The bonds are due 2010 to 2039.

Proceeds will be used to fund capital projects.

Another big deal set for Tuesday comes from Idaho. The state is set to sell $500 million in series 2009 tax anticipation notes, according to a sales calendar.

The notes (MIG 1/SP-1+/F1+) will be sold through lead manager Seattle-Northwest Securities Corp., and are due 2010.

Proceeds will be used to fund general expenses ahead of the collection of taxes.

Kentucky building bonds

Also ahead, the Kentucky State Property and Building Commission is set to price $389.99 million in series 2009 revenue and revenue refunding bonds on Wednesday, according to a sales calendar.

The deal includes $179.87 million in series 2009A project No. 95 tax-exempt bonds and $210.12 million in series 2009C taxable Build America Bonds.

The bonds (Aa3/A+/AA) will be sold through lead manager Morgan Stanley & Co. Inc.

Proceeds will be used to refund existing debt, as well as to fund the purchase of real estate, construct and equip buildings and other properties in the state.

On the West Coast, the Port of Seattle is scheduled to sell $310.265 million in series 2009 revenue and refunding bonds on Thursday, said a sales calendar.

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

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

Virgin Islands rum sale planned

Coming up on Tuesday is a sale that will shake up the rum world in the Caribbean. Puerto Rico and the U.S. Virgin Islands are in a battle for federal tax rebates for producing rum.

Tuesday's $250 million sale of series 209A subordinated revenue bonds from the Virgin Islands Public Finance Authority will fund the construction of a rum production facility.

The bonds (Baa2//BBB) will be sold on a negotiated basis with J.P. Morgan Securities Inc. and Citigroup Global Markets Inc. as the lead managers.

The bonds are due 2013 to 2037.

Proceeds will be used to make a loan to Diageo USVI Inc. to construct, acquire and equip the rum facility.

Tuolome floats bonds

Also ahead, the Tuolome Wind Project Authority in Washington State is set on Tuesday to sell $430 million in series 2009 revenue bonds, said a calendar.

The sale includes $220 million in series 2009 revenue bonds and $210 million in series 2009 taxable bonds.

The bonds (A1/A+/A+) will be sold through lead manager Citigroup Global Markets Inc.

Proceeds will be used to develop the authority's wind energy projects.

University of Texas to rope $250 million

University of Texas Board of Regents announced plans to offer a $250 million series 2009D revenue financing system bond (Aaa/AAA/AAA), according to a preliminary offering statement.

The bonds are scheduled to price on Thursday.

J.P. Morgan Securities Inc. and Morgan Stanley & Co. Inc. will act as lead underwriters for the negotiated issue.

Proceeds will be used to retire outstanding debt.

The University of Texas Board Of Regents is located in Austin, Texas.

Turnpike bonds on the road

In other upcoming deals, the Pennsylvania Turnpike Commission is scheduled to price $227.43 million in series 2009A federally taxable turnpike revenue Build America Bonds Tuesday, said a sales calendar.

The bonds will be sold through lead manager Barclays Capital Inc.

The bonds are due 2039.

Proceeds will be used to fund turnpike renovations.

Elsewhere, City of San Antonio is expected to price during the week of June 22 $215.94 million in series 2009D electric and gas systems revenue refunding bonds, said a sales calendar.

The bonds (Aa1/AA/AA+) will be sold on a day-to-day basis.

The bonds will be sold through Morgan Stanley & Co. Inc.

Proceeds will be used to fund electric and gas projects, as well as to refund existing debt.

Indiana Finance to price bonds

Also coming up, the Indiana Finance Authority plans to price $215.825 million in series 2009 lease appropriation bonds Tuesday, said a preliminary official statement.

The sale includes $22.975 million in series 2009A bonds and $192.85 million in series 2009B Build America Bonds.

The bonds (Aa3/AA+/AA) will be sold on a negotiated basis with lead managers Morgan Stanley & Co. Inc. and Goldman, Sachs & Co.

The 2009A bonds are due 2012, 2018 and 2022 to 2029. The 2009B bonds are due 2039.

Proceeds will be used to construct and expand the Indianapolis Convention Center.

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