Municipals awash in new paper; Pennsylvania prices $300 million; U Cal to begin $800 million offer

By Cristal Cody and Aaron Hochman-Zimmerman

New York, March 10 - Municipal investors kept secondary trading on the back shelf as the market was hit by a wave of new supply.

"We are inundated with new paper," a trader said.

The Commonwealth of Pennsylvania led off by pricing a $300 million issue to set a benchmark for the week.

"It came a little wider than it normally does," the trader said. "It normally comes at plus 12, but it came at plus 20."

The major issue investors have their sights on is the $800 million from the University of California.

"That's going to set the tone" going forward, he said, after its expected pricing on Thursday. "It's going to be the highlight of the week."

For now, "there's lots of choice in the marketplace," he said, although trading continues to drag.

"Trading is non-existent," he said.

New issues are on the forefront of peoples' minds, "secondary trading is by appointment only," he said.

Keystone state sets benchmark

Pennsylvania priced $300 million first series 2009 general obligation bonds at a true interest cost of 4.21%, according to Joe Toy, a state budget analyst.

J.P. Morgan Securities Inc. won the competitive bid. Buchanan Ingersoll & Rooney PC acted as bond counsel for the deal.

Merrill Lynch & Co., Barclays Capital Inc., Citigroup Global Markets Inc. and Wachovia Bank NA also entered bids.

"Everything went smoothly," Toy said. "There were no hang-ups or hitches."

"All of the bids were in before 11 o'clock," he said.

The bonds carry maturities from 2010 to 2029.

Proceeds will be used for construction and rehabilitation of public buildings and to fund redevelopment assistance projects and bridge projects.

"The market's strong response during this time of great economic uncertainty reflects both the financial community's faith in the value of our bonds and the commonwealth's record of sound fiscal management," state budget secretary Mary Soderberg said in a statement.

Oregon DOT cruises to $347.29 million

The Oregon Department of Transportation priced $347.29 million series 2009A revenue obligation bonds at a TIC of 4.669858%, according to chief financial officer Les Brodie.

"We were very pleased," Brodie said about the issue, which was oversubscribed on both the retail and institutional sides.

The yields were generally "in line with what we were expecting," he said.

Banc of America Securities LLC acted as lead underwriter for the negotiated deal.

The bonds priced with serial maturities from 2009 to 2029 and term bonds maturing from 2030 to 2033.

Yields ranged from 0.59% to 5.00%.

The serial bonds due in 2019, 2021, 2022 and 2023 are callable at par on May 15, 2019.

Proceeds will be used for road and bridge modernization projects.

The Oregon Department of Transportation is based in Salem.

Rhode Island finds $72.5 million

The Rhode Island Convention Center Authority announced the pricing of $72.5 million in refunding revenue bonds, according to Betty Sullivan, director of financial operations for the authority.

The issue was split into $72 million of the series 2009A bonds and $500,000 of series 2009B bonds.

Merrill Lynch acted as lead underwriter for the negotiated bonds.

Proceeds will be used to refund the authority's series 2001A bonds, finance an associated swap termination payment and pay the premium for a debt service reserve fund facility.

The Rhode Island Convention Center Authority is located in Providence.

Wichita prices $106.92 million

The City of Wichita in Kansas priced $106.92 million over three tranches, according to debt coordinator Catherine Gilley.

The city priced $28.39 million in series 2009A sales tax refunding bonds with maturities from 2010 to 2017.

The auction was won by Hutchinson Shockey Erley & Co. among four bidders at a TIC of 2.755091%.

The city priced $19.47 million in series 2009B refunding bonds due from 2009 to 2016.

The auction was won by Stifel, Nicolaus & Co. Inc. among four bidders at a TIC of 2.504210%.

Wichita also priced $59.06 million in series 228 improvement temporary notes due April 8, 2010.

J.P. Morgan Securities won the auction among six bidders at a TIC of 0.0669137%.

Proceeds will be used to provide temporary financing for capital improvements and to refund the city's series 2002 sales tax bonds, series 754 G.O. bonds sold in 1999, series 763 G.O. bonds sold in 2000 and series 764 and series 766 G.O. bonds sold in 2001.

California gold rush

The roll of issues coming from the Golden State looks to continue as the University of California plans to open the retail period for its $800 million series O-P general revenue bonds on Wednesday, according to an offering statement.

Barclays Capital is the lead manager for the negotiated deal.

The sale is expected to close on Thursday.

The University of California is based in Oakland.

Howard County brings competitive offer

Howard County in Maryland announced the offering of $93.525 million G.O. bonds in two tranches, according to an offering statement.

The bonds will be split into $68.565 million series 2009A consolidated public improvement bonds and $24.96 million series 2009A metropolitan district bonds.

The competitive sale will begin on March 24. The winning bidder will be determined by the lowest TIC offered.

The bonds will be sold at a maximum coupon of 6% and a reoffer price no lower than 98.

The Howard County seat is located in Ellicott City.

Let the bidding start

Looking ahead to the week of March 16, several issuers plan to hold competitive sales.

Wake County in North Carolina expects to sell $502.365 million in G.O. and refunding bonds through a competitive sale on March 17, according to notices of sale.

The $135 million series 2009A G.O. public improvement bonds have serial maturities from 2012 through 2026.

The $300 million series 2009B G.O. public improvement bonds have serial maturities from 2010 through 2025.

The $67.365 million series 2009C G.O. refunding bonds have serial maturities from 2010 through 2015.

Waters and Co., LLC is the financial adviser for the series 2009C bonds.

The proceeds will be used to fund construction, expansion and renovations of public school, library and community college facilities; refinance $300 million in series 2008 G.O. bond anticipation notes; and refund the series 1998 G.O. public improvement bonds with serial maturities from 2010 through 2015.

The seat of Wake County is Raleigh.

Also ahead, King County of Washington intends to sell $300 million in G.O. bonds through a competitive sale on Monday, according to a notice of sale.

The series 2009 bonds (/AAA/AA+) have serial maturities from 2014 through 2039.

Seattle-Northwest Securities Corp. is the financial adviser.

The proceeds will be used to finance improvements to the sewer system.

The King County seat is located in Seattle.

Moving to Oregon, the Portland Community College District intends to price $200 million in G.O. bonds through a competitive sale on March 19, according to the notice of sale.

The series 2009 bonds will be sold for the counties of Multnomah, Washington, Yamhill, Clackamas and Columbia.

The bonds have serial maturities from 2010 through 2029.

Western Financial Group, LLC is the financial adviser.

The proceeds will be used to upgrade technology and expand, modernize and construct college facilities.

Utah's Intermountain Power Agency to raise $329.26 million

In other large deals coming up, the Intermountain Power Agency of the State of Utah plans to sell $329.255 million in revenue refunding bonds, according to a preliminary official statement.

The series 2009A subordinated power supply bonds (A1//) may price the week of March 16, a market source told Prospect News.

"The pricing date has not been set for this issue, but it may be as early as next week," the source said.

The bonds have serial maturities from 2010 through 2019.

Morgan Stanley & Co. Inc. is the senior manager of the negotiated sale.

The proceeds will be used to refund the outstanding series 1985E variable-rate power supply revenue and refunding bonds, series 1985F variable-rate revenue bonds, series 1998A revenue refunding bonds and series 1999A revenue refunding bonds.

Illinois Finance Authority to sell for OSF Healthcare

In other sales, the Illinois Finance Authority tentatively plans to price $150 million in revenue bonds for OSF Healthcare System on March 18, a sellside source told Prospect News on Tuesday.

The series 2009A bonds (A2/A/A) will price through a negotiated sale led by senior manager Merrill Lynch.

The proceeds will be used to refinance and redeem the series 2005A and 2005B revenue refunding bonds and the series 2007B, 2007C and 2007D auction-rate revenue bonds.

OSF Healthcare is based in Peoria.

Michigan Municipal Bond Authority delays sale

The Michigan Municipal Bond Authority delayed Tuesday's sale of $67.465 million in series 2009B local government pooled loan program revenue bonds due to market conditions, the issuer told Prospect News.

"The market's not in great shape, so we're evaluating whether we're going to go this week or not," executive director Thomas Letavis said.

The bonds may price later this week or the week of March 16, he said.

The sale includes $37.385 million local project bonds for the Charter County of Wayne. The bonds have serial maturities from Nov. 1, 2009 through Nov. 1, 2018 and terms due 2026 and 2028.

The remaining pool includes $1.195 million revenue sharing bonds with serial maturities from Nov. 1, 2009 through Nov. 1, 2018 and terms due 2023 and 2028; $23.57 million state qualified school bonds with serial maturities from 2010 through 2016; and $5.315 million school program bonds with serial maturities from 2010 through 2014.

Fifth Third Securities will manage the negotiated sale.

The proceeds will be used to purchase municipal obligations.

Hamilton County sells G.O.s, BANs with 2.02%-3.58% TICs

Hamilton County in Tennessee priced $55 million in G.O. bonds and bond anticipation notes on Tuesday, the issuer told Prospect News.

The $31.5 million series 2009 bonds (Aa1//AA+) priced with a 3.583% TIC, said finance director Louis Wright.

The bonds priced with 3% to 4.375% coupons for the serial maturities from 2010 through 2024.

The $23.5 million series 2009 taxable bond anticipation notes (MIG 1//F1+) priced with a 2.022% TIC.

The notes, due March 1, 2010, were sold with a 2.25% coupon, Wright said.

Morgan Keegan & Co., Inc. was the winning bidder in the competitive sales.

The proceeds will be used to refund outstanding commercial paper bond anticipation notes and to finance public works projects, including for roads and water and sewer facilities.

"We've got commercial paper on the Street and we're refunding on April 9," Wright said.

The county seat of Hamilton County is Chattanooga.

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