Dasny to bring $668.5 million mental health bonds Tuesday; secondary market takes hit as stocks rise

By Sheri Kasprzak

New York, Nov. 24 - Despite the holiday-shortened week, muni issuers are out in force selling billions in bonds, mostly on Tuesday.

"Basically, if it's going to get done this week, it's getting done tomorrow [Tuesday]," said one sellside source.

"I predict very, very little is going to price Wednesday, and Friday things close down early, so not much is going to get done then."

Even though things were looking sunny for new issues, things were less rosy over in the secondary market Monday where municipals slipped as stocks surged on news that the federal government will be bailing out troubled Citigroup Inc.

Traders said Monday that almost everything was off by a bit, even during a light trading session.

Moving back to new issues, Tuesday's busy day will be led by the Dormitory Authority of the State of New York, which is slated to price $668.5 million in series 2008 mental health services facilities improvement bonds, said a calendar of upcoming sales.

The bonds (/AA/A+) will be sold on a negotiated basis with J.P. Morgan Securities Inc. as the lead manager.

A retail order period was expected for Monday, and final pricing will be determined Tuesday.

The sale includes $595.22 million in series 2008F bonds and $73.28 million in series 2008G bonds.

Proceeds will be used to refund outstanding bonds.

Public Gas Partners' sale

Also coming up Tuesday, Public Gas Partners of Georgia is scheduled to price two offerings totaling $225.97 million, according to sales calendars.

The offering includes $165.86 million in gas project revenue bonds for Gas Supply Pool No. 1 and $60.11 million in gas project revenue bonds for Gas Supply Pool No. 2.

The Gas Supply Pool No. 1 bonds are comprised of $110.36 million in series 2008A tax-exempt bonds and $55.5 million in series 2008B taxable bonds.

The 2008A bonds are due 2011 to 2018 with a term bond due 2022. The 2008B bonds are due 2022.

Proceeds will be used to repay a line of credit that was used to acquire the Gas Supply Pool No. 1.

The Gas Supply No. 2 bonds include $39.905 million in series 2008A tax-exempt bonds and $20.205 million in series 2008B taxable bonds.

The 2008A bonds are due 2011 to 2018 with a term bond due 2022. The 2008B bonds are due 2022.

Proceeds will be used to repay a line of credit used to acquire the Gas Supply Pool No. 2.

J.P. Morgan Securities and Wachovia Securities are senior managers for both offerings.

Municipal Gas Authority deal

In another offering that will benefit Public Gas Partners, the Municipal Gas Authority of Georgia is planning to sell $120 million in series C gas revenue bonds, according to a calendar.

The authority plans to use the proceeds to fund Public Gas Partners' acquisition of natural gas reserves.

The bonds (MIG 1/SP-1+/F1+) will be sold with Wachovia as the senior manager.

The bonds are due Dec. 16, 2009.

Arlington, Texas, in the market

Moving out west, Arlington, Texas, is gearing up to price $169.98 million in series 2008 special tax revenue bonds on Tuesday, said a calendar of upcoming deals.

The bonds (Aaa/AAA/) will be sold through lead managers J.P. Morgan Securities and Banc of America Securities.

The bonds are due 2017 to 2020 with term bonds due 2027 and 2031.

Proceeds will be used for the construction, planning, acquisition and development of the Dallas Cowboys Complex.

Also on Tuesday, the State of Rhode Island and Providence Plantations are scheduled to bring $107.41 million in series 2008 general obligation bonds to the table, said a calendar of upcoming deals.

The bonds will be sold on a negotiated basis with Morgan Stanley as the senior manager.

The sale includes $86.875 million in series 2008B consolidated capital development loan bonds, $8.5 million in series 2008C capital development loan bonds and $12.035 million in series 2008D consolidated capital development loan refunding bonds.

The 2008C bonds are due 2010 to 2023 with a term bond due 2028. The 2008C bonds are due 2010 to 2018, and the 2008D bonds are due 2011 to 2018.

Proceeds will be used to refund all of the state's outstanding series 2000B bonds.

Wisconsin's clean water bonds

Looking elsewhere, the State of Wisconsin plans to price its previously announced $100 million in series 2008-3 clean water revenue bonds on Tuesday, said a calendar of deals.

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

The bonds are due 2010 to 2029.

Proceeds will be used for making pledged loans to municipalities for improvements to wastewater treatment facilities.

Virginia PSA to sell bonds

Moving to light action on Wednesday, the Virginia Public School Authority is slated to sell $125.14 million in series 2008B school financing bonds Wednesday, according to a sales calendar.

The bonds will be sold through senior manager Morgan Keegan & Co. with Davenport & Co., J.P. Morgan Securities and M.R. Beal & Co. as co-managers.

The bonds are due 2009 to 2033.

Proceeds will be used for the construction, renovation and equipment of school buildings.

Also out of Virginia, the Virginia Public Building Authority is scheduled to price $150 million in series 2008B public facilities revenue bonds the week of Dec. 1, said a calendar released by the issuer.

The bonds (Aa1/AA+/AA+) will be sold on a negotiated basis with BB&T Capital Markets as the lead manager.

The bonds are due 2009 to 2028.

Proceeds will be used for financing or refinancing the acquisition, construction, improvement, rehabilitation and equipment of public facilities used by the commonwealth and its agencies, as well as financing the commonwealth's share of the costs of local and regional jail and juvenile detention facilities.

Methodist Hospital sale ahead

Looking a bit further ahead, the California Statewide Communities Development Authority plans to price $303.76 million in series 2008 FHA-insured mortgage revenue bonds for the Methodist Hospital of Southern California, according to a preliminary official statement.

Goldman, Sachs & Co. is the lead manager for the negotiated sale.

The bonds will be structured with serial and term bonds, but the maturities have not been set at this time.

Proceeds will be used to pay for or repay the hospital for the construction, acquisition or equipment of hospital facilities, as well as refund all of the hospital's outstanding series 1996 certificates of participation. The rest will be used to pay a portion of the interest accruing on the series 2008 bonds since construction began.

NYC water authority bonds

Also coming up, the New York City Municipal Water Finance Authority plans to price $300 million in series 2009DD water and sewer system second general resolution revenue bonds, said a preliminary official statement released Monday.

The bonds (Aa3/AA+/AA) will be sold on a negotiated basis with Merrill Lynch & Co. as the senior manager.

Proceeds from the sale will be used to pay for improvements to the water and sewer system as well as to repay a portion of the authority's commercial paper notes.

Secondary seen weaker

Meanwhile, things looked much bleaker in the secondary market as munis traded lower on an improved stock market and a hit taken by Treasuries.

"It was a good day for stocks, but it was bad for us," said one trader reached Monday afternoon. "Most everything I've seen is down today. The long end looks like it's getting hit particularly bad."

Trading activity was light, the trader said, ahead of the holiday, but because of losses in Treasury bonds, the muni market followed suit.

"It's not the worst day ever. Losses are pretty light, but everything is off by at least a little," he added.

In addition, the muni market is waiting for economic data later this week, the trader noted.

"We'll see how that plays out," he added.

The Consumer Confidence Index for November will be released Tuesday.

Looking to particular trades, the Washington State Healthcare Facilities Authority's 6% 2023s sold for Catholic Health Initiatives were seen trading at 5.894%.

Meanwhile, the Nassau County Sewer and Storm Water Finance Authority of New York's series 2008A revenue bonds were seen in play. The 5.375% 2028s were seen trading Monday at 4.849%.

Also out of New York, the Dasny's 2008 personal income tax revenue refunding bonds were trading. The 5% 2028s were trading at 5.1%.

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