Los Angeles County brings $1.3 billion in upsized sale; Kansas authority sells $333.8 million

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, June 11 - Thursday proved to be a very active day for the primary market, led by a massive sale out of Los Angeles County.

Meanwhile, the market continued to experience some weakness during the session. One trader said he saw yields up by as much as 3 basis points over the course of the day.

"Looks like the long end is getting hit the worse," he noted.

Moving back to that Los Angeles sale, the county sold $1.3 billion in series 2009 tax and revenue anticipation notes (/SP-1/F1+).

The notes priced at a true interest cost of 0.8%, according to Glenn Byers, the county's assistant treasurer and tax collector.

Merrill Lynch & Co. is the underwriter for the negotiated bonds, which carry a coupon of 2.5%.

The bonds, which were planned at the amount of $1.1 billion, will mature on June 30, 2010.

Kansas Development sale

In other primary news, the Kansas Development Finance Authority sold $333.805 million in series 2009C hospital revenue bonds for Adventist Health System, said Rebecca Floyd, executive vice president of the authority.

The bonds (A1/A+/AA-) priced Thursday morning through lead manager Ziegler Capital Markets Inc.

The bonds, which are due 2038, priced with a TIC of 5.687725% and a net interest cost of 5.674451%.

Proceeds will be used to refund a portion of Adventist Health's variable-rate demand bonds.

Also priced this week was $330.545 million in series 2009B revenue financing system Build America Bonds (Aaa/AAA/AAA) from the University of Texas System, according to a source familiar with the deal.

The bonds priced Wednesday at a TIC of 4.1373%.

The bonds carry a coupon of 6.276% and a 4.079% effective yield, after the 35% subsidy attached to the Build America Bond format.

The bonds' first maturity is on Aug. 15, 2026 with the final maturity on Aug. 15, 2041. The bonds are callable at par in 2036.

Morgan Stanley & Co. Inc. and J.P. Morgan Securities Inc. were lead underwriters for the negotiated deal.

Proceeds will be used to refinance commercial paper notes and fund campus improvements.

The University of Texas is located in Austin, Texas.

NYC water sells $500 million

Also on Wednesday, the New York City Municipal Water Finance Authority sold $500 million in series 2009GG water system second resolution revenue bonds, said an official statement.

The bonds (Aa3/AA+/AA) were sold through lead manager M.R. Beal & Co.

The deal includes $304.785 million in series 2009GG-1 bonds and $195.215 million in series 2009GG-2 bonds.

The 2009GG-1 bonds are due 2024 to 2032 with a term bond due 2039. The serials have coupons from 4.125% to 5.25% and yields from 4.28% to 5.04%. The 2039 bonds have a 5% coupon to yield 5.15%.

The 2009GG-2 bonds are due 2035 and 2040. The 2035 bonds have a 5% coupon to yield 5.06%, and the 2040 bonds have a 5.25% coupon to yield 5.1%.

Proceeds will be used to repay commercial paper and pay for construction projects.

Nebraska Public Power prices

Nebraska Public Power District priced $168.2 million in series 2009 general revenue bonds (A1/A+/A+) at a 4.67% TIC Wednesday, according to Christine Pillen, deputy assistant treasurer.

The bonds were broken into a $100 million taxable tranche with maturities in 2013 and 2014, $50.3 million in Build America Bonds due 2026 and 2035 and $17.9 million in tax-exempt bonds due from 2010 to 2020.

Morgan Stanley acted as lead underwriter for the negotiated bonds. Barclays Capital Inc., Goldman Sachs & Co. and JPMorgan were co-managers.

Proceeds from the sale will finance generation and transmission additions, fund the primary account in the debt service reserve fund, refund $70 million in taxable series notes and finance capital additions to the Cooper Nuclear Station.

The Nebraska Public Power District is located in Columbus, Neb.

Atlanta plans $600 million

Moving to the week's coming sales, the City of Atlanta plans to price its previously announced $600 million in series 2009A water and wastewater revenue bonds, said a sellside source familiar with the deal.

The bonds (Baa1/A/BBB+) will be sold through senior managers JPMorgan and Merrill Lynch.

The bonds are due 2010 to 2029 with term bonds due 2034 and 2039.

"The city of Atlanta is planning on selling $600 million of water and sewer debt next week, which is the city's first water sale since the severe 2007-2008 drought in the region," said Guy LeBas, chief fixed income strategist for Janney Montgomery Scott LLC.

"That drought severely impacted water system usage, and the subsequent economic problems extended the revenue downturn, which has resulted in a relatively low credit rating from A/BBB+ from S&P and Fitch. Next week's deal will be coming uninsured and will represent a test for the lower rated, but still mainstream, component of the new-issue municipal markets."

Proceeds will be used to pay for capital improvements to the city's water and wastewater system as well as refund the city's series 2006 commercial paper notes.

DART deal ahead

Also coming up during the week is a $1 billion sale of series 2009 revenue and Build America Bonds from Dallas Area Rapid Transit of Texas, said a calendar of upcoming sales.

The bonds (Aa3/AAA/) will be sold through senior manager Siebert Brandford Shank & Co. LLC.

Proceeds will be used to make a deposit to an acquisition-and-expansion fund.

In other news from the coming week, the Port Authority of New York and New Jersey is expected to sell $750 million in consolidated bonds Thursday, according to a sales calendar.

The deal includes $150 million in 157th series consolidated bonds, $250 million in 158th series consolidated bonds and $350 million in 159th series consolidated bonds.

The 157th bonds are due 2019, the 158th series are due 2024 and the 159th series are due 2029.

Citigroup Global Markets Inc. and Loop Capital Markets LLC are the lead managers.

Proceeds will be used to pay for capital expenditures at the One World Trade Center site and retail component at the site.

Cook County bonds

In other upcoming sales, the County of Cook in Illinois is expected to sell $520 million in general obligation bonds and G.O. refunding bonds, said a preliminary official statement. Though no exact pricing date has been set, the pricing is expected for the coming week.

The sale includes $270 million in series 2009A G.O. refunding bonds and $250 million in series 2009B taxable G.O. Build America Bonds.

The bonds (Aa3/AA/AA-) will be sold on a negotiated basis with Loop Capital and Ramirez & Co. Inc. as the lead managers.

Proceeds will be used to pay for capital improvement and capital equipment projects as well as to refund existing debt.

The county seat is Chicago.

N.J. Economic Development sale

Also ahead, the New Jersey Economic Development Authority plans to price $400 million in series 2009A school facilities construction notes Monday, said a preliminary official statement.

The notes (MIG 1/SP-1+/) will be sold on a competitive basis with Powell Capital Markets Inc. as the financial adviser.

The notes are due June 18, 2010.

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

The authority is based in Trenton.

Metro Washington airport deal

On Tuesday, the Metropolitan Washington Airports Authority is set to sell $338.175 million in series 2009C airport system revenue bonds, said a sales calendar.

The bonds (Aa3/AA-/AA) will be sold through lead manager Piper Jaffray & Co.

Proceeds will be used to refund the authority's flexible-term PFC revenue notes as well as make a deposit to a debt service reserve fund.

Also during the week, the Michigan Department of Transportation will offer $300 million in series 2009 grant anticipation notes, according to a calendar of upcoming sales.

Merrill Lynch will act as underwriter for the negotiated deal.

Miami-Dade sale

In other upcoming sales, Miami-Dade County in Florida is scheduled during the week of June 15 to sell its previously announced $340 million in series 2009 professional sports franchise facilities tax and revenue refunding bonds, said a calendar of upcoming deals.

The bonds (Aa2/AAA/AA) will be sold through lead manager Merrill Lynch.

Proceeds will be used to fund costs associated with constructing a new baseball system for the Florida Marlins.

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