Muni yields hold steady; Bay Area Toll Authority brings $1.5 billion downsized revenue bonds

By Sheri Kasprzak

New York, June 24 - Municipal yields were largely unmoved on Thursday as primary action continued to dominate investor attention, said market insiders.

"There's a lot of new stuff coming through the pipeline, so that's taking some attention away from secondary, but we're seeing a decent amount of activity," said one trader asked about the impact of several new offerings on the secondary market.

"It's picking up."

Although yields were mostly unchanged, the market retained its firmer tone.

Primary action during the day was led by the Bay Area Toll Authority of California, which sold $1.5 billion in a downsized offering of series 2010 subordinate toll bridge revenue Build America Bonds. The authority had originally planned to bring $1.75 billion of the bonds.

"It was a good move for them," said one sellside source of scaling the offering down.

"They were able to achieve a solid pricing on the amount they got."

Even after being trimmed, the deal was the second-largest Build America Bonds sale since the State of Georgia's $2.2 billion offering of nuclear power plant Build America Bonds priced in March.

The bonds (A1/A+/) were sold on a negotiated basis with Bank of America Merrill Lynch and Citigroup Global Markets Inc. as the lead managers.

The bonds are due 2030, 2040 and 2050. The 2030 bonds have a 6.793% coupon, the 2040 bonds have a 6.918% coupon, and the 2050 bonds have a 7.043% coupon, all priced at par.

Proceeds will be used to fund the construction of a new east span of the San Francisco-Oakland Bay Bridge.

The San Francisco-based authority operates the Bay Area's toll bridges and roads.

Oregon brings $838.01 million

Also on Thursday, the State of Oregon priced $838.01 million in series 2010A full faith and credit tax anticipation notes, said a term sheet.

The 2% notes were not formally reoffered. The notes (MIG 1/SP-1+/F1+) are due June 30, 2011.

Citigroup and Bank of America Merrill Lynch were the senior managers.

Proceeds will be used to meet the state's seasonal cash flow needs.

Union County sells

In other primary news, Union County in New Jersey priced $182.746 million in series 2010 bond anticipation notes, said a term sheet.

The notes were sold competitively with Wells Fargo Securities Inc. taking a $132.746 million portion of the notes and Beneficial Bank taking the remaining $50 million.

The $132.74 million of notes won by Wells Fargo have a 2% coupon, priced at 101.509.

The $50 million of notes won by Beneficial Bank have a 1.25% coupon, priced at 100.797.

Both notes are due July 1, 2011.

Proceeds from the sale will be used to finance capital needs for the coming fiscal year.

The county seat is Elizabeth, N.J.

Providence Health bonds price

Elsewhere, the Washington Health Care Facilities Authority sold Thursday $174.24 million in series 2010A revenue bonds for Providence Health & Services, said a pricing sheet.

The bonds (Aa2/AA/AA) were sold on a negotiated basis with Bank of America Merrill Lynch as the lead manager.

The bonds are due 2030, 2032 and 2039. The 2032 and 2039 bonds have split maturities. The 2030 bonds have a 4.875% coupon, priced at 98.788. The 2032 bonds have a 5% coupon, priced at 99.064 and a 5.25% coupon, priced at 101.902. The 2039 bonds have a 5% coupon, priced at 98.033 and a 5.25% coupon, priced at 101.132.

Proceeds will be used to finance the construction of a 12-story health-care facility to expand the health-care system's Everett, Wash., site.

Hartford prices bonds

In other news, the Metropolitan District of Hartford County in Connecticut sold Thursday $135.78 million in series 2010 general obligation bonds, said a pricing sheet.

The bonds were sold competitively. The winning bidder could not be determined by press time.

The sale included $91.9 million in series 2010A bonds and $43.88 million in series 2010B bonds.

The 2010A bonds are due 2011 to 2035 with coupons from 3% to 5%. The 2010B bonds are due 2011 to 2040 with coupons from 3% to 5%.

Proceeds will be used to finance water and sewer system improvements, clean water initiatives and combined funding projects.

The district operates as a quasi-municipal corporation to provide water and sewer services and sewage collection and disposal services to its member municipalities - Hartford, East Hartford, West Hartford, Rocky Hill, Newington, Wethersfield and Windsor.

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