Yields end flat as short week begins; Illinois to price $900 million G.O. Build America Bonds

By Sheri Kasprzak

New York, July 6 - Municipal yields were largely unchanged Tuesday as a shortened week got off to a slow start, said market insiders.

"It's a pretty quiet day," said one trader.

"There's some light activity, a lot of reinvestment more than anything, but we're looking basically flat. I'd say the firmness we experienced last week has moved into this week as well. I just think everyone's on a summer schedule now. In general, we're probably going to see more reinvestment, there's going to be less in the way of new money coming in, and it will stay this way probably through the end of August."

The shortened week's primary calendar will be relatively light. Jefferies & Co. and Citigroup Global Markets Inc. will sell $396.265 million in series 2010 revenue bonds for the Virgin Islands Public Finance Authority on Thursday.

The offering includes $308 million in series 2010A senior lien revenue bonds (Baa2/BBB/BBB+) and $88.265 million in series 2010B subordinate lien revenue bonds (Baa2/BBB-/BBB).

Proceeds will be used for working capital as well as to refinance a portion of the authority's working capital credit facility.

Based in Christiansted, the authority assists the government with fiscal duties and financing requirements for capital projects.

Westlake bonds price

In light primary action, the Louisiana Local Government Facilities and Community Development Authority sold $100 million in series 2010 tax-exempt revenue bonds for the Westlake Chemical Corp., said a statement from the company.

The 6.5% bonds are due Aug. 1, 2029.

Proceeds will be used to fund a loan to Westlake to expand, refurbish and maintain its facilities in the Louisiana parishes of Calcasieu and Ascension.

"We are pleased to have completed this transaction, which increases our financial flexibility going forward and helps to fund our growth in Louisiana," said Albert Chao, Westlake's chief executive officer, in the statement.

Based in Houston, Westlake manufactures petrochemicals, polymers and fabricated products, including ethylene, polyethylene, styrene, propylene, caustic, VCM, PVC and PVC pipe.

Illinois sets sale

Looking out on the horizon, the State of Illinois plans to price $900 million in series 2010-5 general obligation Build America Bonds on July 14, said a preliminary official statement and a calendar of upcoming sales.

The bonds (A1/A+/A-) will be sold on a negotiated basis with Citigroup as the lead bookrunner. The co-senior managers are Morgan Keegan & Co. Inc. and PNC Capital Markets LLC.

Proceeds will be used to fund transportation projects and capital projects throughout the state.

Montgomery plans deal

Also ahead, Montgomery County in Maryland is scheduled to price $325 million in series 2010 consolidated public improvement bonds Thursday, said a sales calendar.

The bonds will be sold competitively with Public Financial Management Inc. as the financial adviser.

The offering includes $178.75 million in series 2010A tax-exempt bonds, $122.55 million in series 2010B bonds and $23.7 million in series 2010C taxable bonds.

The 2010A bonds are due 2011 to 2022, and the 2010B bonds are due 2023 to 2030. The 2010C bonds are due 2023 to 2030.

Proceeds will be used to refinance all or a portion of the county's commercial paper notes, which were used to construct, acquire and equip county facilities. The remainder will be used to finance current capital projects throughout the county.

The county seat is Rockville, Md.

Delaware River deal ahead

Also coming up on Thursday, the Delaware River Port Authority of New Jersey is set to sell $320 million in series 2010 revenue bonds, said a calendar of coming deals. The sale had originally been scheduled to come to market on July 1.

The bonds (A3/A-/) will be sold through senior manager Citigroup.

The sale includes tax-exempt bonds and Build America Bonds, but the exact breakdown was not immediately available.

The Build America Bonds are due 2040, and the tax-exempt bonds are due 2027 to 2030 with a term bond due 2040.

Proceeds will be used to finance the authority's capital improvement program.

Based in Camden, N.J., the authority maintains and develops the Camden-Philadelphia port district, which links New Jersey and Philadelphia with four bridges, mass transit and a ferry.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.