Alaska sells variable-rate demand bonds with 0.55% initial rate; Florida Water Pollution Control plans sale

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, Jan. 6 - Pricing action picked up slightly on Tuesday, with the State of Alaska bringing $50 million in variable-rate bonds, and more offerings are planned for later in the week.

Some of the sales, including an offering from the Municipal Energy Agency of Nebraska, are holdovers from 2008 - offerings that just couldn't get done with the poor market conditions of the latter part of the year.

"That's going to be the majority of bonds you're going to see this month, I feel," said one sellside source reached Tuesday afternoon.

"So many issuers put off sales near the end of the last year that they're just now putting them back on the table."

Looking at the Alaska offering, the state sold $50 million in series 2009A AMT international airports system variable-rate demand revenue refunding bonds (Aaa/VMIG 1//AA+/F1+) with an initial 0.55% interest rate, said Deven Mitchell, the state's executive director of debt management. High interest in the offering, Mitchell said, lowered the week's yield from 60 bps.

"We had buyers for the bonds several times over, so we adjusted to 55 bps," Mitchell told Prospect News in an interview Tuesday.

Proceeds from the sale will be used to refund the state's series 2006C variable-rate demand revenue bonds.

Florida water sale ahead

Looking to offerings coming up later this week, the Florida Water Pollution Control Financing Corp. is scheduled to price $201.12 million in series 2008A water pollution control revenue bonds Thursday, said a calendar of upcoming sales.

The bonds will be sold on a negotiated basis with Citigroup Global Markets as the senior manager and are due 2010 to 2023 with a term bond due 2029.

Proceeds will be used for water pollution control projects throughout the state.

Also this week, Chester County in Pennsylvania is set to price $121.865 million in series 2009 general obligation bonds, said a preliminary official statement.

The bonds (Aaa) will be sold on a negotiated basis through lead manager Merrill Lynch & Co.

The bonds are due 2009 to 2029.

Proceeds will be used to refund the county's series 2001, 2003, 2004, 2006 and 2007 G.O. bonds as well as the Delaware Valley Regional Finance Authority's series 2007B, 2007C and 2007D G.O.s.

Nebraska energy deal

Originally scheduled for pricing in 2008, the Municipal Energy Agency of Nebraska is now set to sell $78.3 million in series 2009A subordinate power supply system revenue bonds Thursday, said a preliminary official statement.

The offering was originally slated to price in November on a competitive basis. However, the bonds were re-designated and will now be sold on a negotiated basis with Goldman, Sachs & Co. as the senior manager.

The bonds (//A) are due 2010 to 2019 with term bonds due 2028 and 2039.

Proceeds will be used to acquire a coal-fired plant and make capital improvements to it as well as to redeem the agency's series 2003B auction-rate bonds and make a deposit to a debt service reserve fund.

Guilford County G.O.s

Moving a bit further out, Guilford County in North Carolina plans to price $164.6 million in series 2009A G.O. public improvement bonds Jan. 13, said a preliminary official statement.

The bonds (//AA+) will be sold on a competitive basis.

The bonds are due from 2010 to 2029.

Proceeds will be used for the construction of school, parks and recreation, law enforcement and community college facilities in the county.

Also coming up, JEA of Jacksonville, Fla., is expected to sell $125 million in series 2009A subordinated revenue bonds, said a preliminary official statement.

The bonds will be sold on a negotiated basis with Banc of America Securities LLC as the senior manager. The bonds are due 2010 to 2028 with term bonds due 2033 and 2039.

Proceeds will be used for the construction and acquisition of improvements, extensions and additions to JEA's electric power system.

Secondary looks firmer

Moving to secondary market action, a trader reached in the afternoon said volume had picked up somewhat during the day and the tone firmed up slightly.

"We're up a few basis points," the trader said.

"It's looking a lot better in terms of trading volume. We're seeing some interest on the longer end."

Looking to specific trades, the Port Authority of New York and New Jersey's series 153 consolidated bonds were in play Tuesday. The 5% 2038s were seen trading at 5.192%.

Elsewhere, the Dormitory Authority of the State of New York's series 2008A-2 revenue bonds for the Memorial Sloan-Kettering Cancer Center were also trading. The 5% 2026s were trading at 5.115% Tuesday.

In other trading news Tuesday, the State of Ohio's series 2008-1 state infrastructure project revenue bonds were in play. The 5% 2012 were trading at 2.21%.

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