University of California plans $2 billion commercial paper notes; Tyler ISD, Texas, to price $125 million

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, Dec. 22 - With the holiday season upon us, municipals activity continued to be sparse with only a handful of very small offerings up for grabs this week, sellsiders said.

"So far this week, I've seen maybe three or four upcoming deals," a source at a financial adviser said. "They're all really small deals. Less than $5 million."

Still, the calendar for 2009 is already filling up with upcoming deals, including an offering of up to $2 billion in commercial paper notes from the Regents of the University of California, according to a preliminary official statement.

The notes (P-1/A-1+/) will be sold on a negotiated basis with Banc of America Securities LLC; Goldman, Sachs & Co.; J.P. Morgan Securities Inc. and Morgan Stanley & Co. as the underwriters.

The sale includes series A tax-exempt notes and series B taxable notes.

Proceeds will be used for capital improvements, equipment and working capital.

Tyler ISD to sell bonds

Also ahead this January, the Tyler Independent School District of Texas is expected to price $124.865 million in series 2009 unlimited tax school building bonds, according to a preliminary official statement.

The bonds will be sold on a negotiated basis with Merrill Lynch & Co. as the lead manager.

The bonds are due 2009 to 2034.

Proceeds will be used for the acquisition, construction, equipment and renovation of school buildings throughout the district.

Oglethorpe Power prices bonds

In light pricing news, the details were revealed Monday in Oglethorpe Power Corp. of Georgia's $248.35 million in series 2008 tax-exempt pollution control revenue bonds. The bonds were sold through the Development Authority of Burke County, Ga., and the Development Authority of Monroe County, Ga., according to a form 8-K filed with the Securities and Exchange Commission.

Of the total, $103.6 million was issued through the two development authorities jointly as series 2008 term rate refunding bonds. They mature in 2038, 2039 and 2040.

Out of this amount, $41.125 million carry a coupon of 6½% through March 31, 2011.

The remaining $62.475 million term bonds due carry a coupon of 6¾% through March 31, 2012.

The other $144.75 million was issued through Development Authority of Burke County and sold as series 2008 fixed-rate refunding bonds due July 1, 2023. They carry a coupon of 7% and have mandatory redemptions in 2020, 2021 and 2022.

Proceeds will be used to refinance outstanding tax-exempt pollution control revenue bonds.

Oglethorpe had intended to refinance an additional $123 million of outstanding pollution control revenue bonds and issue $9 million in new debt to fund an environmental compliance project; however, the issue was postponed "due to current difficulties in the capital markets," the filing said.

Oglethorpe will reschedule the issue for sometime in 2009.

Secondary unmoved

Looking to the secondary market, a trader said Monday afternoon that trading volume remained very light during the day and he expects that to continue throughout the week.

The tone of the market, however, was relatively unchanged.

"It's not moving that much," he said. "We're not seeing a lot of stuff trading today and it's not going to take off this week, honestly."

In specific trades, the City of Philadelphia's recently freed-to-trade series 2008B general obligation bonds were seen in motion Monday. The 7.125% 2038s were seen trading at 6.2%. The bonds priced Dec. 16 to yield 7.25%.

Also traded Monday was the Dormitory Authority of the State of New York's school districts revenue bond financing program revenue bonds. The 4% 2011s were seen trading at 2.5%.

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