Week gets a slow, but firm start; Iowa to bring $602 million in I-Jobs Program bonds Tuesday

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, July 13 - Monday saw little pricing activity ahead of a fairly busy week for the primary market. Still, traders said the tone of the market remained firm with yields dropping a few basis points across the curve.

"It's been a really quiet day," noted one trader reached during the afternoon.

"Yields might be down by a few basis points across the yield curve."

The mid-Atlantic region was quiet to start out the week, a trader said.

Still, a retail offer period for the $341.975 North Carolina Turnpike Authority senior-lien revenue bonds expected Tuesday produced "a few million [dollars]" with "a nice flow," the trader said.

"It's a nice yield," the trader said.

Merrill Lynch & Co. Inc. and Banc of America Securities LLC will bring the bonds to market. The sale includes $29.475 million in series 2009A state annual appropriation revenue bonds and $312.5 million in series 2009B state annual appropriation revenue Build America Bonds.

The 2009A bonds are due 2019 to 2024 with term bonds due 2029 and 2039. The maturities of the 2009B bonds were not known at press time.

Proceeds will fund engineering costs, develop rights-of-way and roadways in the Triangle Expressway System, and pay for maintenance costs.

Also in the capital region, some heard rumors of a deal worth $1 billion or more from the Metropolitan Washington Airports Authority.

If the deal comes, "that's pretty hefty," but "I don't see that on the calendar yet," the trader said.

Meanwhile, the area has seen a dearth of issuance in recent weeks, "it's just killing us," the trader said.

The issues that have priced have been well balanced, the trader said.

Some investors go for yield and others for safety. It is important to keep a variety of product on hand.

"That's why I have a seat," the trader said.

Iowa to sell $602 million

Looking to the week's upcoming sales, the State of Iowa plans to sell $602.375 million in series 2009 I-Jobs Program special obligation bonds (Aa3/AA/) on Tuesday.

Barclays Capital Inc. is the senior manager for the deal, which includes $387.445 million in series 2009A tax-exempt bonds and $214.93 million in series 2009B Build America Bonds.

The 2009A bonds are due 2011 to 2029 and the 2009B bonds are due 2034.

The proceeds will fund the state's I-Jobs program, which invests in the state's infrastructure.

United Water sale

In light primary action Monday, the New Jersey Economic Development Authority priced $65 million in series 2009 facilities revenue bonds for United Water, said a statement from the utility.

The bonds (/A-/) are due July 1, 2039 and have a 5.5% coupon, priced at par.

Edward Jones was the sole underwriter for the deal.

Proceeds will renovate and upgrade United Water's Haworth Water Treatment Plant and other water transmission infrastructure projects.

"The new upgrades will help United Water continue its leadership role in the water industry," said Bertrand Camus, United Water's chief executive officer.

"Our Haworth facility is now the largest water treatment plant in the U.S. to use advanced Dissolved Air Floatation."

United Water, based in Harrington Park, N.J., is a subsidiary of Suez Environment, a water and waste management services company. United Water provides water and wastewater services.

Louisiana Public Facilities deal

Also coming up this week, the Louisiana Public Facilities Authority is expected to sell its previously announced $150 million in series 2009A hospital revenue bonds on Tuesday, said a sellside source close to the deal.

The bonds (A2/A+/) will be sold through senior manager Merrill Lynch & Co. Inc.

A retail order period was conducted Monday.

Proceeds will be used to refurbish and equip Our Lady of Lourdes Regional Medical Center.

Secondary firms up

Moving to the secondary market, traders said activity was fairly light, but also firm. One trader said yields dropped by a few basis points, with the biggest drop in the long end of the curve.

Among the light trading action Monday was the recently priced bonds from Oklahoma Agricultural and Mechanical Colleges Board of Regents for Oklahoma State University. The 4.625% 2029 bonds were seen trading near par. The 5% 2034s were seen at 4.386%. The 4.125% 2023 bonds were seen at par.

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