Muni yields firm; Minnesota sells $865 million; Ohio Water Authority to sell $451.36 million

By Cristal Cody

Tupelo, Miss., Aug. 3 - Municipal yields ended on a firm tone on Tuesday with a few new bonds pricing in the market.

"Some maturities' yields were a little bit lower," said Alan Schenkel, managing director at Janney Montgomery Scott LLC. "It probably lagged the Treasury market a little bit, but it ended on a good tone. There was some new issues in the market today - a fair amount of activity."

The State of Minnesota brought one of the biggest deals of the day. The state priced $865 million of general obligation bonds (Aa1/AAA/AAA) in three tranches.

"The last I saw it still had some balances, but it was well received," Schenkel said.

The competitive sale included $635 million of series 2010A state various-purpose bonds and $225 million of series 2010B state trunk highway bonds with serial maturities from 2011 through 2030 and $5 million of series 2010C taxable state bonds due Aug. 1, 2015.

The series 2010A bonds were sold at a 3.16% true interest cost to winning bidder RBC Capital Markets Corp.

The series 2010B bonds were sold to Piper Jaffray & Co. with a TIC of 3.12%.

The series 2010C bonds were sold to Morgan Keegan & Co. with a TIC of 1.86%.

"We were very happy, actually," with the sale results, Curt Yoakum, spokesman for the Minnesota Management & Budget Commission, told Prospect News. "We had a good number of bidders."

Public Resources Advisory Group was the financial adviser.

The proceeds will be used to finance programs and capital projects, including educational facilities, parks and the state trunk highway system, and to develop the state's agricultural resources by financing the Rural Finance Authority's programs.

Day sees other deals

Other issuers also priced deals on Tuesday, including the New York Transitional Finance Authority with $800 million in bonds and the Miami-Dade County Expressway Authority of Florida, which upsized its issue of series 2010 toll system revenue bonds (A3/A/A-) to $413 million from $350 million.

Additional pricing terms on both deals were not immediately available.

Although the primary market was a little busier on Tuesday, new offerings are expected to "trickle through August. It's a traditional slow month," Schenkel said.

Alabama Water Authority prices

At the start of the week, the Alabama Water Pollution Control Authority priced $64.75 million in 2010B revolving fund loan refunding bonds with a 2.83% TIC and coupons from 2% to 3%, a financial source said Tuesday.

"It was excellent," the source said of the competitive sale conditions on Monday. "We had six bids."

The issue was upsized from $63.39 million.

The bonds (/AA-/) have serial maturities from 2012 through 2021.

Wells Fargo Securities LLC was the winning bidder in the competitive sale.

Thornton Farish Inc. was the financial adviser.

The authority plans to use the proceeds to refund its outstanding series 1998A-B bonds.

Ohio Water Authority to sell

Looking ahead to new deals, the Ohio Water Development Authority plans to sell $451.355 million in series 2010B water pollution control loan fund revenue bonds (Aaa/AAA/), according to a preliminary official statement.

Morgan Stanley & Co. Inc. is the senior manager of the negotiated sale.

Proceeds will be used for the Water Pollution Control Loan Fund and to fund the debt service reserve fund for the authority's series 2010B water quality bonds.

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