Supply stretches spreads; Cal State prices $457 million; Texas A&M to raise $217.5 million

By Cristal Cody and Aaron Hochman-Zimmerman

New York, March 5 - Municipals widened as investors went for Treasuries on Thursday.

Still, much of the widening had to do with an oversupply of paper in the market, a senior trader said.

The "floodgates" are about to open, he said, while at the desk "we're inundated with a lot of new deals" and "starting to see spreads get wider to Treasuries."

Investors have been quick to notice the high-quality products that have hit the market.

"Everyone is looking for quality," he said, mostly "at 10-years and in."

"We've seen pretty good results," a financial adviser said about his ability to put deals through the pipeline.

Nonetheless, the trader noted that the new bonds from the Trustees of California State University had to pay the levels the market demanded.

"You've got to price to sell," he said.

Cal State brings $457 million

The Trustees of California State University priced $457 million series 2009A revenue bonds, according to a market source.

Barclays Capital Inc. acted as lead underwriter for the negotiated deal.

Proceeds will be used to finance and refinance the acquisition, construction, improvement and renovation of university facilities.

The California State University system is based in Long Beach.

Kansas side prices $104.18 million

Meanwhile, the Unified Government of Wyandotte County/Kansas City in Kansas priced $104.18 million in general obligation bonds and temporary notes, according to Lew Levin, county chief financial officer.

"It went very good ... better than we expected," said Levin, who earlier predicted a true interest cost of 5% for the series A bonds.

The competitive issue was split into five pieces.

The series 2009A bonds were won by UBS Securities at a TIC of 4.925490%.

The series 2009B G.O. improvement bonds were won by Morgan Keegan & Co., Inc. at a TIC of 6.076570%.

The series 2009III were won by Depfa First Albany Securities at a TIC of 0.972600%.

The series 2009IV were won by Banc of America Securities at a TIC of 0.952757%.

The series 2009V municipal temporary notes were won by UMB Bank of Kansas City.

Maturities for the issue range from 2010 to 2029.

Springsted Inc. acted as financial adviser for the deal.

Beantown prices $108.94 million

Continuing east, the City of Boston priced $108.94 million G.O. bonds on Thursday, according to a source familiar with the deal.

The competitive bonds priced with a TIC of 3.89% and were split into two trances. Both tranches have maturities from 2010 to 2029.

Barclays Capital Inc. won the auction for the series 2009A bonds, and UBS Securities won the series 2009B bonds.

Proceeds will be used to fund various capital projects as well as to refund the outstanding series 1998C, 2001A and 2002A G.O. bonds.

Public Financial Management acted as financial adviser for the deal.

LasVegas-Clark County strikes $50 million

Las Vegas-Clark County Library District in Nevada priced $50 million series 2009 G.O. medium-term bonds (/AA/), according to Fred James, county chief financial officer.

"It went smoothly," James said.

The bonds priced with a TIC of 3.91%.

JPMorgan Chase & Co. won the auction for the bonds with maturities ranging from 2012 to 2018.

Hobbs, Ong & Associates, Inc. and Public Financial Management Inc. acted as financial advisers for the deal.

Proceeds will be used to acquire, construct, improve and equip library facilities in the district.

Also, the Clark County Water Reclamation District intends to price $260 million in G.O. bonds through a competitive sale on Wednesday, according to sale notices.

The sale includes $135 million in series 2009A and $125 million in series 2009B water reclamation bonds.

The bonds (Aa2/AAA/) have serial maturities from 2013 through 2038.

Hobbs, Ong & Associates and Public Financial Management are the financial advisers.

The proceeds will be used to construct, reconstruct, improve and extend the district's sanitary sewer system.

D.C. offers $445.09 million

In the capital, those $445.09 million in revenue and revenue refunding bonds previously announced by the District of Columbia should price through an upcoming negotiated sale on Wednesday, a source told Prospect News.

The income tax secured bonds (Aa2/AAA/AA) also will be offered through a retail order period on Tuesday.

The $310 million series 2009A revenue bonds have serial maturities from 2010 through 2029.

The $135.09 million series 2009B revenue refunding bonds have serial maturities from 2020 through 2027.

Merrill Lynch & Co. is the senior manager of the sale.

The proceeds will be used to provide funds for capital projects and to refund the outstanding series 2003C, 2003D1, 2003D2 and 20003D3 G.O. bonds.

Shelby County to sell $235 million G.O. bonds

In another large sale coming in the week ahead, Shelby County in Tennessee intends to sell $235 million in G.O. public improvement and school refunding bonds on March 12, the issuer said Thursday.

The series 2009A bonds (Aa2/AA+/AA) also will be offered through a retail order period on Wednesday, said Mike Swift, administrator of administration and finance for the county.

The bonds have serial maturities from 2010 through 2022.

Morgan Keegan is the senior manager of the negotiated sale.

The proceeds will be used to refund portions of the outstanding series 2007A, 2008A and 2008B G.O. bonds on April 6 and to pay termination frees for interest rate swaps associated with the refunded bonds.

The county seat is located in Memphis.

Aggies cultivate $217.5 million offer

On the horizon, the Board of Regents of the Texas A&M University System plan to sell $217.495 million in university fund bonds through a competitive sale, according to sale notices.

The bonds will be sold between Tuesday and Aug. 31, according to the board.

The sale includes $152.43 million series 2009A permanent university fund bonds with serial maturities from 2019 through 2034 and $65.065 million series 2009B bonds with serial maturities from 2010 through 2034.

First Southwest Co. is the financial adviser.

The proceeds will be used to refund a portion of the series 1998 university fund bonds and for university improvements.

Texas A&M is located in College Station.

In other new deals, George Washington University in Washington, D.C., plans to price $200 million in taxable bonds.

The series 2009 bonds (A1/A+/) are due Feb. 1, 2019.

Barclays Capital is the senior manager of the negotiated sale.

The proceeds will be used for general university purposes.

Ohio brings $110 million for University Hospitals

Moving into health care, the State of Ohio plans to sell $110 million in revenue bonds for University Hospitals Health System, Inc. in Cleveland, according to a preliminary official statement.

The series 2009A and 2009B hospital revenue bonds (A2/A/) will be sold through a negotiated sale led by senior manager Citigroup Global Markets Inc.

The proceeds will be used to finance projects for new hospital facilities, pay or reimburse the corporation for capital equipment and fund a debt service reserve fund.

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