Seattle brings largest competitive sale since September; Kansas Development Finance prices $66 million

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, Nov. 19 - Pricing action picked up again on Wednesday, with billions in sales in the works. The day's news was led by the City of Seattle, which priced what looks to be the largest competitive offering since mid-September.

The city sold $215.845 million in series 2008 water system improvement and revenue refunding bonds, said Michael van Dyck, the city's director of debt financing.

Merrill Lynch & Co. was the winning bidder for the sale, and the true interest cost came to 4.987713%.

The bonds (Aa2/AA+/) are due 2009 to 2038, but the full terms were not immediately available, van Dyck said.

"This competitive offering was a huge success with five syndicates bidding," van Dyck said.

"This was the largest competitively sold offering since mid-September," he noted. "In the days immediately preceding the offering, S&P had upgraded the city's water system to AA+."

Proceeds from the deal will be used for improvements to the city's water system and for refunding existing bonds.

Looking ahead for the city, van Dyck said a $275 million sale of tax-exempt revenue bonds is in the works for the city's electric utility in early December. Details of that sale were not immediately available.

NYC G.O.s price

In other pricing news Wednesday, the City of New York brought $425 million in series 2009F general obligation bonds, said Carol Kostik, the city's deputy comptroller of public finance.

"We are in the market now and will not be able to provide coupons and yields until the sale is complete," Kostik said Wednesday afternoon.

The bonds were being sold on a negotiated basis with Merrill Lynch as the lead manager.

The sale includes $400 million in series 2009F-1 bonds and $25 million in series 2009F-2 bonds.

The bonds are due 2010 to 2031, and proceeds will be used for capital expenditures.

Kansas Development sale

Also priced Wednesday was $65.99 million in series 2008CW water pollution control revolving fund revenue bonds from the Kansas Development Finance Authority.

The bonds (Aaa/AAA/) were sold on a competitive basis with Banc of America Securities winning the bid, said Jim MacMurray, the authority's vice president of finance.

The bonds are due 2010 to 2029 with coupons from 3% to 5.125% and yields from 2.22% to 5.2%.

Proceeds will be used to disburse loans to municipalities in Kansas.

Puerto Rico delays offering

Elsewhere on Wednesday, as the Commonwealth of Puerto Rico celebrated Discovery Day, the Puerto Rico Municipal Finance Agency postponed the sale of $240 million in series 2008A bonds (Baa3/BBB-/), according to a source close to the deal.

The issuer cited volatile market conditions for the postponement.

The bonds were scheduled to be sold on Wednesday through lead managers Merrill Lynch, Ramirez & Co. and RBC Capital Markets.

The bonds have serial maturities from 2009 to 2018 with term bonds due 2023, 2028 and 2033.

Proceeds were expected to be used to purchase Puerto Rico G.O. bonds and notes from municipalities and the Government Development Bank.

Municipal Gas of Georgia deal

Looking ahead to upcoming offerings, the Municipal Gas Authority of Georgia is expected to price $120 million in series C gas revenue bonds, said a preliminary official statement released Wednesday.

The bonds (MIG 1/SP-1+/F1+) will be sold on a negotiated basis through lead manager Wachovia Bank. The bonds are due Dec. 16, 2009 and initially bear interest at a fixed rate.

Proceeds will be given to Public Gas Partners, a nonprofit natural gas concern, for the purchase of natural gas reserves.

Also ahead, the State of Rhode Island and Providence Plantations plans to sell $107.41 million in series 2008 G.O. bonds, according to a preliminary official statement.

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 bonds will be sold through senior manager Morgan Stanley.

The 2008B bonds are due 2010 to 2023 with term bonds 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.

Chicago Park District bonds

In other upcoming deals, the Chicago Park District plans to price $97.045 million in series 2008 G.O. refunding bonds, said a preliminary official statement.

Calls to the issuer for the exact pricing date were not immediately returned Wednesday.

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

The offering includes $14.865 million in series 2008F bonds, which are due 2022 to 2024 with a term bond due 2033; $36.38 million in series 2008G bonds, which are due 2010 to 2018; $28.465 million in series 2008H bonds, which are due 2010 to 2017; and $17.335 million in series 2008I bonds, which are due 2010 to 2019.

Proceeds will be used to refund all or a portion of the district's outstanding G.O. bonds as well as to fund the construction, maintenance and improvements to parks within the district.

Secondary market seen quieter

Even though the secondary market has seen plenty of action earlier this week, one trader said Wednesday cooled off substantially, with only a few names trading on the whole.

"I'm not seeing a lot going on today," the trader said Wednesday afternoon. "It's been a really quiet day for a change."

One thing he had seen trading was the New York State Dormitory Authority's series A mental health services facilities improvement revenue bonds. The 5% 2021s were seen at 5.078%, the trader said.

Also out of the Northeast, the New Jersey State Transportation Trust Fund's 5.75% series A 2031s were seen trading at par.

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