NYC Transitional Finance sells $650 million upsized BARBs; Chandler sells bonds with 4.04%, 3.67% TICs

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, Jan. 13 - Despite a shaky economy and market conditions that have forced some issuers to cut their offerings down in size, the New York City Transitional Finance Authority priced Tuesday an upsized $650 million in series 2009S-3 building aid revenue bonds, said Ray Orlando, spokesman for the city's Office of Budget Management.

The offering was increased to $650 million from $300 million due to strong retail and institutional demand, said a statement released by the authority Tuesday afternoon. The offering had a two-day retail order period that began on Friday.

The bonds (A1/AA-/A+) are due 2011 to 2039 with yields ranging from 2.05% to 5.55%.

Citigroup Global Markets was the senior manager with Goldman, Sachs & Co. as co-manager.

"During the institutional pricing today [Tuesday], the TFA received $540 million of priority orders from institutions," said a statement released by the authority.

The authority said it pulled in $217 million in retail orders during the two-day retail order period.

Proceeds will pay a portion of some five-year school plans throughout the city.

A sellside source reached Tuesday afternoon said the day proved to be a small window in an otherwise dismal market for municipals.

"A lot of issuers that had been planning to bring deals last year found a good market today," he said.

"It's all about timing and today was the day to price. I think we were seeing a lot of strong institutional interest today, and that has helped some of these deals go way over what they [the issuers] were expecting to price."

Chandler sells $286 million

In other pricing news from the new offering-packed day, the City of Chandler in Arizona priced $286 million in a competitive series 2009 general obligation and excise tax bond sale (Aa2/AAA/AAA), according to a statement from the city.

The $252 million G.O. bonds received two bids and carry a true interest cost of 4.04%. The $34 million excise tax revenue bonds received six bids and carry a TIC of 3.67%. Piper Jaffray and Robert W. Baird offered the winning bids, respectively.

The bonds carry maturities from 2010 to 2028.

Proceeds will be used for construction and improvement of city facilities.

U of Oklahoma's bonds

Elsewhere, the Board of Regents of the University of Oklahoma priced $65.17 million negotiated series 2009 general revenue bonds (/AA-/AA-), according to Chris Kuwitzsky of the board.

Yields were tentatively near 5% or below, Kuwitzsky said.

The bonds were broken into two tranches.

The larger tranche was a $56.585 million series 2009A tax-exempt tranche with maturities from 2011 to 2024 and term bonds due 2029, 2034 and 2039.

The smaller $8.585 million series 2009B taxable tranche has maturities from 2011 to 2023.

BOSC Inc. and Citigroup Global Markets led the issue.

Proceeds will be used for the construction and renovation of facilities at the university's Norman, Okla., campus.

Also expected to price Tuesday was a $750 million offering of series 2009A electric system revenue bonds (Aa1) from the Salt River Agricultural Improvement and Power District in Arizona, but calls for the terms of the bonds were not immediately returned. Goldman, Sachs & Co. is the senior manager for that sale, with proceeds going for capital improvements, including power generation, transmission and distribution.

The State of Minnesota had also been on scheduled to price $400 million in G.O.s (Aa1//AAA) on a competitive basis, but the terms were not immediately available Tuesday.

Illinois Finance sale ahead

Moving to upcoming sales, the Illinois Finance Authority approved roughly $300 million in municipal issuance including bonds for OSF Healthcare, according to Diane Hamburger of the authority.

"All projects were approved as submitted," she said Tuesday of the list that also included over $1 million for agriculture, $7 million for industry and $7.5 million for community development.

The largest of the bonds, for OSF Healthcare, was approved at an issuance level of over $650 million, Hamburger said, but the actual issue is expected to be half of that amount.

"That $650 [million] has a number of contingencies in it," she said.

Funding needs may be satisfied through other methods that are not yet finalized; she said, "They were not expecting that to be an actual issuance number."

The authority has not yet determined a schedule for issuance. When asked about a timeframe for the sale, Hamburger joked, "In this economy?"

Baylor Health deal

Also coming up, the Tarrant County Cultural Education Facilities Finance Corp. in Texas is expected to sell $215.18 million in series 2009 health revenue refunding bonds for the Baylor Health Care System Project, said a preliminary official statement released Tuesday.

The bonds (Aa2/AA-/) will be sold on a negotiated basis with Merrill Lynch & Co. and Goldman Sachs as the senior managers.

The bonds are due 2009 to 2019 with term bonds due 2024 and 2029.

Proceeds will be used to refund Baylor Health's series 2001B and 2001C revenue bonds and to repay advances made under a loan from Banc of America and JPMorgan Chase Bank.

Secondary gets better

For the second week in a row, the secondary market has been enjoying good market conditions, said a trader reached Tuesday.

"It's looking good for us today," he said. "Volume is a bit better and we're up a bit here and there. Yields seemed a bit stronger during the morning, but kind of tapered off this afternoon."

Among Tuesday's trades, the Dormitory Authority of the State of New York's series 2007 lease revenue bonds saw some action. The 5% 2037s were seen trading at 5.134%.

© 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.