Princeton University brings $1 billion in taxable bonds; Ohio pulls planned G.O. bond sale

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, Jan. 15 - In one of the biggest offerings so far this year, Princeton University priced $1 billion in taxable bonds, marking a week of big deals and solid pricing action.

"It's really amazing that we could go from doing practically nothing at the end of '08 to billions in sales at the beginning of '09," said one sellside market source reached Thursday afternoon.

"This week has been good. We're seeing a lot of activity, a lot of investor interest, so it's been good for issuers who were hoping to sell their stuff last year."

New Jersey's Princeton sold its $1 billion in series 2009 taxable bonds (Aaa/AAA/) on Wednesday through lead managers Goldman, Sachs & Co.; J.P. Morgan Securities Inc.; and Morgan Stanley & Co.

The university sold $500 million in 10-year bonds with a 4.95% coupon priced at 99.62 and $500 million in 30-year bonds with a 5.7% coupon priced at 99.721.

Proceeds will be used for working capital.

Ohio nixes sale

Moving to other pricing action on Thursday, the State of Ohio pulled its planned $138.245 million offering of series 2009 general obligation refunding bonds because it simply doesn't need the cash anymore.

The bonds (Aa1/AA+/AA+) had been set to price Thursday through lead managers Merrill Lynch & Co. and Fifth Third Securities.

The deal was going to include $56.995 million in series 2009A higher education G.O. refunding bonds, $31.81 million in series 2009A common schools G.O. refunding bonds and $49.44 million in series 2009A infrastructure improvement refunding bonds.

The proceeds would have been used to refund bonds originally used for higher education, common schools and infrastructure improvements.

In other pricing news, the School District of Miami-Dade County in Florida had been slated to price $132 million in series 2009 revenue anticipation notes Thursday, but the competitive sale was pushed back for "administrative purposes."

The notes, which are due Jan. 28, 2010, will now price on Wednesday.

Proceeds will renew a portion of loans financed or refinanced by the district's series 2008B revenue anticipation notes and will also retire a portion of the 2008B RANs, which are due Jan. 30, 2009.

LIPA's deal

Also on Thursday, the Long Island Power Authority of New York priced $250 million in series 2009A electric system general revenue bonds, but the terms were not immediately available.

The bonds (//A-) were sold through lead manager Morgan Stanley, and proceeds will be used to refund bonds and pay for capital expenses.

The Pennsylvania Turnpike Commission was also set to bring a substantial sale to market Thursday, but calls for the terms on the $317.14 million series 2009A revenue bonds were not immediately returned.

Citigroup Global Markets Inc. was the lead for the bonds, which are due 2010 to 2024 with term bonds due 2029 and 2039.

Proceeds will be used for grants to mass transit agencies for highway, road and bridge projects. The rest will fund a debt service reserve fund.

Indiana Bond Bank sale ahead

Looking ahead, the Indiana Bond Bank said it will bring to market $365 million in series 2009A advance funding program notes in January.

The notes (MIG 1/SP-1+/) will be sold on a negotiated basis with J.P. Morgan Securities as the senior manager, according to a preliminary official statement.

The notes are due Jan. 5, 2010.

Proceeds will be used to purchase warrants from some state entities ahead of the collection of ad valorem taxes.

NYC water offering

In another large sale planned for January, the New York City Water Finance Authority is planning to offer $300 million in series 2009EE water and sewer system second general resolution revenue bonds, said a preliminary official statement.

The bonds (Aa3/AA+/AA) will be sold on a negotiated basis with Siebert Brandford Shank & Co. as lead manager.

Proceeds will be used to expand and repair the city's water infrastructure.

San Francisco USD sale

In other upcoming sales, the San Francisco Unified School District announced plans Thursday to sell $150 million in series 2009B G.O. bonds.

Banc of America Securities LLC is the senior manager for the deal.

The bonds (Aa3/AA-/) are due 2009 to 2024.

Proceeds will be used to modernize and repair school buildings at 58 district sites.

Secondary improves

Looking to the secondary muni market, a trader said short-end bonds improved dramatically and were up several basis points on the day.

"Lots of improvement today," he said. "Short-end stuff is doing really well, and we're seeing loads of demand for shorter-term bonds today than we have recently. Looks like the short end is up by several basis points. Five or six, from what I've seen."

Moving to specific trades, the University of Oklahoma's recently freed-to-trade series 2009A general revenue bonds were seen in play. The 4.75% 2029s were trading at 4.85% on Thursday. The 5% 2034s were seen at 5.16%.

In other recently freed bonds, the Salt River Project Agricultural Improvement and Power District of Arizona's recent series 2009A revenue bonds were trading. The 3% 2011s were seen at 1.56% on Thursday.

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