Muni yields rise; Ohio State University plans $740.69 million; Massachusetts bond deals ahead

By Cristal Cody

Tupelo, Miss., Sept. 3 - Municipal yields rose on stronger economic data in light trading, sources said.

Yields were up 3 to 5 basis points on the day.

"We're actually selling off a little bit," said one trader. "The employment numbers came in stronger than anticipated, so going in to the holiday, yields are going up a little bit on the municipal side. There's not a whole lot of activity. Others are just holding bonds and are not looking to add before the holiday."

The Labor Department said that the economy lost 54,000 jobs overall, compared with a forecasted drop of 105,000, and private-sector jobs rose by 67,000 instead of a 40,000 expected jump.

Other bond sellers took a wait-and-see approach to the coming week, a source said.

"It's pretty dead," the source said.

Looking ahead, September promises to be active with new deals.

Ohio State University announced on Friday it plans to sell $740.685 million in general receipts bonds.

The sale includes $654.905 million in series 2010C Build America Bonds with a term maturity of 2040 and $85.78 million in series 2010D tax-exempt bonds, according to a preliminary official statement. Maturities have not been set for the series 2010D bonds.

Morgan Stanley & Co. Inc. and Barclays Capital Inc. are the joint bookrunners.

Proceeds will be used to pay for new college facilities and renovations of existing facilities at the Ohio State University Medical Center, campus transportation and parking facilities and student life facilities.

The university is located in Columbus, Ohio.

Washington Sanitary District to price

Also coming up in September, the Washington Suburban Sanitary District in Maryland intends to price $240 million in consolidated public improvement bonds, according to a preliminary official statement dated Friday.

The deal includes $120 million in series 2010A tax-exempt bonds and $120 million in series 2010B Build America Bonds.

The series 2010A bonds have serial maturities from 2011 through 2020. The series 2010B bonds have serial maturities from 2021 through 2030.

The bonds will price via competitive sales on Sept. 14.

Public Advisory Consultants, Inc. is the financial adviser.

Proceeds will be used to fund construction of water supply facilities and water supply lines and sewer pipes and may be used to replace short-term bond anticipation notes.

The district is based in Laurel, Md.

Kalamazoo plans hospital bonds

The City of Kalamazoo Hospital Finance Authority in Michigan intends to sell $124.455 million in hospital revenue and revenue refunding bonds for Bronson Methodist Hospital, according to a preliminary official statement.

The series 2010 bonds (A2//) will be sold through a negotiated sale managed by Ziegler Capital Markets Group.

Proceeds will be used to refund the outstanding series 1998 revenue refunding and improvement bonds and the series 2009 revenue refunding bonds; finance the costs of reconstructing, remodeling and equipping hospital facilities; and pay to terminate all or a portion of interest-rate hedge agreements relating to the series 2006 and series 2009A bonds.

Massachusetts deals ahead

Two new bond sales are expected out of Massachusetts.

The Massachusetts Health and Educational Facilities Authority expects to sell $65 million in series 2010C revenue bonds (Baa3/BBB-/) for the Massachusetts Eye and Ear Infirmary of Boston, according to a preliminary official statement.

The bonds are scheduled to price with term maturities.

Morgan Stanley will manage the negotiated sale.

Proceeds will be used to pay or reimburse a portion of costs to upgrade medical facilities and fund a debt service reserve fund and a capitalized interest account for the bonds.

The Massachusetts Health and Educational Facilities Authority also intends to sell $58.5 million in series 2010C revenue bonds (Baa1/BBB+/) for Lowell General Hospital, according to a preliminary official statement.

The bonds have serial maturities from 2011 through 2020 and terms due 2030 and 2035.

The bonds will be sold through a negotiated sale managed by Cain Brothers & Co., LLC and Bank of America Merrill Lynch.

Proceeds will be used to finance and refinance the demolition of a building and construction of a new six-story hospital facility and other capital improvements, refund the outstanding series 1996B Lowell General Hospital revenue bonds and refinance commercial banking obligations.

The hospital is located in Lowell, Mass.

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