New issue activity explodes; Salt River Project Agro Improvement and Power District to sell $750 million

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, Jan. 12 - Even though pricing action was fairly light Monday, the new offerings are piling up for the week.

The biggest deal of the week comes from the Salt River Project Agricultural Improvement and Power District out of Arizona. The district is gearing up to sell $750 million in series 2009A electric system revenue bonds (Aa1) on Tuesday. Merrill Lynch & Co. is the lead manager for that sale.

The week also includes a $400 million competitive general obligation bond sale from the State of Minnesota, as well as a $317.14 million negotiated sale of revenue bonds from the Pennsylvania Turnpike Commission. Citigroup Global Markets is the senior manager for the Pennsylvania Turnpike sale.

"I think it has more to do with timing than anything else," one sellside market source reached Monday afternoon said when asked about the sudden influx of offerings.

"We're at the beginning of the year, coming out of a year when it was really tough to price. These [offerings] are mostly backlogged from 2008. There are some new things coming out, but I think it tends to be this way at the beginning of the year."

Meanwhile, on Monday, the Tyler Independent School District in Texas had been slated to sell $124.865 million in series 2009 unlimited tax school building bonds, but the finalized terms will not be available until Tuesday, said Tasha Bjork, the district's director of financial services.

When asked what sort of yields the district is hoping for on the bonds, which are due 2009 to 2034, Bjork said, "Around 5% or something like that."

Merrill Lynch is the senior manager for that deal, the proceeds of which will be used to acquire, construct, equip and renovate schools throughout the district.

LIPA to sell $250 million

In other sales planned for the week, the Long Island Power Authority of New York is scheduled to price $250 million in series 2009A electric system general revenue bonds Thursday, said a calendar of upcoming sales.

The bonds will be sold through senior manager Morgan Stanley & Co., and proceeds will be used to refund some outstanding bonds and pay for capital expenses.

Also on Thursday, the New Orleans Aviation Board plans to sell $138.88 million in series 2009 revenue refunding bonds, said a calendar of municipal bond sales.

The bonds (A3//A-) will be sold through lead manager Morgan Keegan & Co. and are due 2010 to 2023.

The offering includes $77.225 million in series 2009A-1 non-AMT bonds, $18.73 million in series 2009A-2 non-AMT bonds, $25.87 million in series 2009B AMT bonds and $17.055 million in series 2009C taxable bonds.

Proceeds will be used to refund and defease the board's series 1993 and 1997 bonds as well as pay fees related to a swap termination agreement.

Ohio sales ahead

Also coming up this week is a slate of sales out of Ohio. The Ohio Building Authority has $139.79 million in series 2009A state facilities bonds coming to market Tuesday, according to a calendar of upcoming deals, and the State of Ohio is gearing up to sell $138.245 million in series 2009 G.O. refunding bonds on Thursday, according to a preliminary official statement.

The Ohio Building Authority bonds (Aa2) will be sold through Wachovia Securities, and the deal includes $60 million in administrative building fund project bonds, $40 million in adult correctional building fund project bonds, $1.725 million in highway safety building fund bonds and $38.065 million in correctional building fund project bonds.

The administrative building bonds and adult correctional building bonds are due 2010 to 2028. The highway safety bonds are due 2010 to 2012, and the juvenile correctional bonds are due 2009 to 2014.

Proceeds will be used to provide capital facilities, which will be leased to the Department of Rehabilitation and Correction of the State of Ohio, as well as to provide capital facilities to be leased to the Department of Public Safety. The remainder will be used to refund the state's series 1999B state facilities refunding bonds for the Juvenile Correction Building Fund Projects.

The state bond sale includes $56.995 million in higher education G.O.s, $31.81 million in common schools G.O.s and $49.44 million in infrastructure improvement G.O.s.

The bonds (Aa1/AA+/AA+) will be sold through Merrill Lynch.

The higher education bonds are due 2010 to 2014, the common schools bonds 2011 to 2013 and the infrastructure bonds 2010 to 2014.

Proceeds from the bonds will be used to refund bonds originally issued to fund higher education, common schools and infrastructure expenses.

Irving, Texas, sale

Coming up on Tuesday, the City of Irving in Texas is expected to price $130 million in series 2009 combination tax and hotel occupancy tax revenue certificates of obligation, said a calendar of sales.

The certificates (Aaa/AAA/) will be sold on a negotiated basis with J.P. Morgan Securities Inc. and Estrada Hinojosa & Co. as the senior managers.

The certificates are due 2013 to 2038.

Proceeds will be used to construct, equip and furnish the city's convention center as well as to make a deposit to the debt service reserve fund.

JEA to price revs

Finally, JEA in Florida is slated to sell $125 million in series 2009A subordinated revenue bonds on Thursday, said a calendar of upcoming deals.

The bonds (Aa3/A+/AA-) will be sold through senior manager Banc of America Securities LLC and are due 2010 to 2028 with term bonds due 2033 and 2039.

Proceeds will be used to construct and acquire improvements, extensions and additions to JEA's electric power system.

Secondary ends firmer

The secondary market began the week on a stronger note, said a trader reached in the afternoon.

"We're up a couple of basis points," he said.

"Not a lot of trading activity to really talk about. What did trade today seemed to be short-term bonds for the most part, which is a change. Most of what we've seen trading the past few weeks has been long-end stuff. We had a few long-end trades, but there really hasn't been much to speak of today."

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