New Jersey Economic Development brings $183.67 million; week ahead bursts with new issues

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, May 28 - A shortened week for municipals meant a light calendar of offerings, but the coming week will more than make up for the lack of new issues, according to sales calendars.

Billions in sales are expected for the coming week as the month of June gets started.

Meanwhile in Thursday's activity, the New Jersey Economic Development Authority sold $183.67 million in series 2009AA school facilities construction refunding bonds, said Thomas Bell, spokesman for the state treasurer's office.

The bonds (//A+) were sold through lead manager Morgan Stanley & Co. Inc.

The bonds are due 2018 and 2020 to 2027 with term bonds due 2029 and 2033. The coupons ranged from 4% to 5.25%, all priced at par.

The true interest cost came at 5.09%.

Proceeds will be used to reduce debt service costs for fiscal year 2009 by $57 million and in FY 2010 by $119 million. The bonds will refund maturities of school construction facilities bonds from series A, C, F, G, I, J, L, O, P, Q, R, T1, U, W and Y, said Bell.

"Demand was strong and the authority was able to successfully reduce yields in the later maturities even as overall market conditions remained challenging," said Bell.

Thedacare prices $127.39 million

Elsewhere in Thursday's pricing action, the Wisconsin Health and Educational Facilities Authority priced a $127.39 million series 2009 revenue bond at a true interest cost of 5.51% for Thedacare Inc., according to executive director, Larry Nines.

"We were very satisfied," Nines said, although "the market [Thursday] was tough, so pricing had to be adjusted upward."

The true interest cost was widened by nearly 7 basis points in order to close the deal, he said.

The $90 million series 2009A bonds carry serial maturities from 2011 to 2024 and term bonds due 2029 and 2038.

The $37.39 million series 2009B bonds carry serial maturities from 2009 to 2020.

Merrill Lynch & Co. acted as underwriter for the negotiated bonds.

Proceeds from the sale will be used to construct, equip and renovate health care facilities and make deposit to debt service reserve fund.

The Wisconsin Health and Educational Facilities Authority is located in Brookfields, Wis.

L.A. to sell $900 million

Looking to next week's primary market, Los Angeles County is expected to sell $900 million in bonds, according to a sales calendar.

The full details of the offering were not immediately available. However, Merrill Lynch & Co. Inc. is set to sell the bonds.

Another large offering comes from the New York Transitional Finance Authority. The authority is expected to sell $600 million in series 2009S-5 building aid revenue bonds on Wednesday, according to a calendar.

The bonds (A1/AA/A+) will be sold through lead managers Citigroup Global Markets Inc. and Goldman, Sachs & Co.

The bonds are due 2011 to 2029 with term bonds due 2034 and 2039.

Proceeds will be used to pay a portion of costs related to the authority's five-year building plan.

N.J. higher education deal

Also coming up, the New Jersey Higher Education Student Assistance Authority plans to price $450 million in series 2009A student loan revenue bonds on Tuesday, said a preliminary official statement. The sale is expected to take place on Tuesday, said a calendar of sales.

The bonds (/AA/A+) will be sold on a negotiated basis with Merrill Lynch & Co. Inc. as the senior manager.

The bonds are due 2013 to 2030.

Proceeds will be used to make student loans, as well as to make a deposit to a capitalized interest fund.

Arizona transportation sale

Another big deal for next week is a $440 million sale of series 2009 transportation excise tax revenue bonds for the Maricopa County Regional Area Road Fund on Tuesday, said a calendar of sales. A retail order period is set for Monday.

The bonds (Aa2/AA+/) will be sold through lead manager Morgan Stanley & Co. Inc.

Proceeds will be used for the fund's improvement projects.

Elsewhere, the City of San Antonio is set to price $351.18 million series 2009 electric and gas system revenue bonds and Build America Bonds on Tuesday for CPS Energy, said a sales calendar.

The bonds (Aa1/AA/AA+) will be sold through lead manager Goldman, Sachs & Co.

The bonds are due 2026 to 2039.

Proceeds will be used to fund capital improvements and to refund CPS's series 1998A bonds.

Washington Metro deal

Also on Tuesday, the Washington Metropolitan Area Transit Authority is scheduled to come to market with a $310.21 million sale of series 2009 gross revenue transit bonds on Tuesday, according to a sales calendar.

A retail order period is set for Monday.

The sale includes $256.21 million in series 2009A bonds and $54 million in series 2009B taxable Build America Bonds.

Goldman, Sachs & Co. is the lead manager.

Proceeds will be used for transit improvements.

Also in the transportation sector, the Los Angeles Metropolitan Transportation Authority is scheduled to sell Thursday $251.46 million in series 2009 proposition C sales tax revenue refunding bonds, said a sales calendar.

The bonds (A1/AA+/) will be sold through lead manager Goldman, Sachs & Co.

The bonds are due 2010 to 2020.

Proceeds will be used to retire commercial paper, refund the authority's series 1993A bonds and terminate the series 1993A bond swap agreement.

Guam bonds to price

In other news, the Government of Guam is set to price its previously announced $283.23 million in series 2009A general obligation bonds on Wednesday, said a calendar of sales.

The bonds (/B+/) will be sold through lead managers Citigroup Global Markets Inc. and Piper Jaffray & Co.

The bonds are due 2014, 2019 and 2039.

Proceeds will be used to fund government-incurred settlement, tax refunds and capital improvements to Guam Memorial Hospital.

Virginia Resource Authority plans deal

Also coming up next week, the Virginia Resource Authority is set on Monday to sell $260.22 million in series 2009 taxable and tax-exempt infrastructure revenue bonds as part of a pooled financing program, said a sales calendar.

The offering includes $79.035 million in senior non-ACE bonds (Aaa/AAA/); $50.195 million in taxable senior bonds (Aaa/AAA/); $47.87 million in subordinated non-ACE bonds (Aa2/AA/); $43.52 million in senior ACE bonds (Aaa/AA/); $21.495 million in taxable subordinated bonds (Aa2/AA/); and $18.105 million in subordinated ACE bonds (Aa2/AA/).

The taxable senior bonds are due 2014 to 2017. The subordinated non-ACE bonds are due 2010 to 2029 with a term bond due 2039. The senior ACE bonds are due 2009 to 2033. The taxable subordinated bonds are due 2014 to 2017 and the subordinated ACE bonds are due 2009 to 2033.

The senior non-ACE bonds are due 2010 to 2029 with a term bond due 2033.

The bonds will be sold through Morgan Keegan & Co. Inc.

Proceeds will be used to fund infrastructure improvements.

Secondary weakens

In line with most of the week, municipals remained weaker, said a trader reached during the afternoon.

"We're off by a few basis points, pretty much over the whole yield curve," said the trader.

"Trading is light. There's very little to talk about today."

In specific trades, the Oregon Health Sciences University's series 2009A revenue bonds were seen moving. The 5.75% 2039s were seen at 5.796%.

The University of Pittsburgh's series 2009A University of Pittsburgh Medical Center bonds were seen in action as well. The 5.375% 2029 bonds were quoted at 5.278%.

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