Municipal yields improve; Ohio State prices $740.69 million; University of Texas brings bonds

By Sheri Kasprzak

New York, Sept. 14 - Municipal yields were slightly better to flat on Tuesday after struggling with some corrections for about a week, a trader reported.

"It definitely caused some concern, and I'm not so sure it's over, but we managed to straighten out a little today, and in some places, yields are even down a little. Looks like long bonds are probably doing a little bit better than short, but things are improved over yesterday and Friday," said the trader.

Meanwhile, it was a big pricing day with larger sales from Ohio State University and the University of Texas System.

Ohio State priced $740.685 million in series 2010 general receipts bonds, said a pricing sheet.

The bonds were sold in two tranches - a $654.905 million tranche of series 2010C Build America Bonds and an $85.78 million tranche of series 2010D tax-exempt bonds.

The 2010C bonds are due June 1, 2040 and have a 4.91% coupon priced at par.

The 2010D bonds are due 2020 to 2032 with coupons from 3% to 5%. The full pricing data was not immediately available Tuesday evening.

"They managed to do pretty well," said one sellsider familiar with the deal.

"There is a lot of competition for BABs right now. The market is really saturated with them, but I think the size helped them draw in a good number of investors."

Morgan Stanley & Co. Inc. and Barclays Capital Inc. were the senior managers.

Proceeds will finance new college facilities and renovations of existing facilities at Ohio State University Medical Center, campus transportation and parking facilities as well as student life facilities.

The university is based in Columbus, Ohio.

U of Texas sells bonds

Elsewhere, the University of Texas System brought $543 million in series 2010 revenue financing system Build America Bonds (Aaa/AAA/AAA), but the full terms were not available by Tuesday evening.

Price talk on the bonds pointed to a spread of 85 basis points over comparable 30-year Treasuries.

J.P. Morgan Securities Inc. was the senior manager.

Calls to the university for comment and pricing terms were not returned Tuesday.

Proceeds will be used to refinance $21.3 million in tax-exempt commercial paper notes and fund various capital improvement projects.

The university systems is based in Austin.

Washington sanitation brings bonds

In other news, the Washington Suburban Sanitary District of Maryland sold $240 million in series 2010 consolidated public improvement bonds, said a pricing sheet.

The bonds were sold competitively, but calls to the issuer for the winning bidder were not immediately returned.

The sale included $120 million in series 2010A tax-exempt bonds and $120 million in series 2010B Build America Bonds.

The 2010A bonds are due 2011 to 2020 with 2% to 5% coupons. Only the 2016 bonds were reoffered, priced at 119.381.

The 2010B bonds are due 2021 to 2030 with coupons from 3.55% to 4.85%, all priced at par.

Proceeds will be used to fund the construction of water supply facilities, water supply lines and sewer pipes as well as to replace short-term bond anticipation notes.

The district is based in Laurel.

Orange bonds go at premium

Orange County in Florida sold $144.395 million in series 2010 tourist development tax refunding revenue bonds, said a term sheet.

The bonds (/A+/AA-) were sold competitively with Bank of America Merrill Lynch winning the bid, according to a source close to the deal.

"They all priced at a substantial premium," the source noted of the bonds.

The bonds are due 2019 to 2024 with 5% coupons across the board.

Proceeds will be used to refund all or a portion of the county's outstanding series 1998A tourist development tax refunding revenue bonds and its series 1998B tourist development tax revenue bonds.

The county seat is Orlando.

Torrance deal prices

Out West, Torrance, Calif., brought $135 million in series 2010A revenue bonds for Torrance Memorial Medical Center on Tuesday, according to a term sheet.

The bonds (A2/A+/) were sold through Citigroup Global Markets Inc. and JPMorgan.

The bonds are due 2016 to 2025 with term bonds due 2030 and 2040. Coupons range from 3% to 5%. The full pricing terms were not immediately available.

Proceeds will be used to finance and reimburse the medical center for some of its health-care facilities.

NYC water deal ahead

Although primary action on Wednesday will remain fairly subdued, the market is gearing up for a large sale from the New York City Municipal Water Finance Authority, which plans to bring $600 million in series 2011AA water and sewer system second general resolution revenue bonds (Aa2/AA+/AA+) through Barclays Capital.

The bonds will be used to repay commercial paper notes and make a deposit to the authority's construction fund.

Indiana to power sale

Looking out on the horizon, the Indiana Municipal Power Agency is prepared to bring to market $145 million in series 2010 power supply system revenue bonds, said a preliminary official statement.

The offering includes $123 million in series 2010A Build America Bonds and $22 million in series 2010B tax-exempt refunding revenue bonds.

Citigroup is the senior manager.

Proceeds will be used to construct the Prairie State coal-fired generating station and to refund existing debt.

Based in Carmel, the agency provides its members with access to electric power and energy.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.