Municipal yields level off after stocks take beating; New York City brings $800 million bonds

By Sheri Kasprzak

New York, June 9 - Muni yields stabilized following some earlier turbulence after the stock market took a hit, market insiders said, and trading activity on the secondary side of the market picked up as well.

"It felt a little better today," said one trader.

"We haven't seen a lot of change over the course of the day, but there's a firmer feeling to the market."

Another trader said the secondary market did pick up in volume on Wednesday after suffering from a lengthy slump.

Amid the action, the Columbus-Franklin County, Ohio, series 2010A taxable capital fund tax credit bonds sold in May were moving. The 6.625% 2027 bonds were trading at 6.086% Wednesday afternoon.

NYC sells G.O.s

Looking to primary activity, the City of New York brought to market $800 million in series 2010H general obligation bonds (Aa2/AA/) on Wednesday, said a pricing sheet.

The offering included $780 million in series 2010H-1 Build America Bonds and $20 million in series 2010H-2 tax-exempt bonds.

The 2010H-1 bonds are due 2017, 2021 to 2023, 2027, 2035 and 2040. Coupons range from 4.106% to 6.246%, all priced at par. The 2010H-2 bonds are due 2012 to 2021 with coupons from 2% to 5%.

In reoffering action, the 5% 2023s were seen trading at 3.609%.

Morgan Stanley & Co. Inc. was the senior manager.

The proceeds will be used for capital purposes.

Denver brings bonds

Elsewhere, the City and County of Denver sold $349.965 million in series 2010 Better Denver Bonds Wednesday, said pricing sheets.

The sale included $37.91 million in series 2010A tax-exempt G.O. Better Denver Bonds and $312.055 million in series 2010B Better Denver Build America Bonds.

The bonds (Aaa/AAA/AAA) were sold competitively. J.P. Morgan Securities Inc. won the 2010A bonds with a 1.437621% true interest cost, and Barclays Capital Inc. won the 2010B bonds with a 5.556601% TIC.

The 2010A bonds are due 2011 to 20216 with coupons from 2% to 5%. The full details were not immediately available.

The 2010B bonds are due 2017 to 2021 with term bonds due 2025 and 2030. Serial coupons range from 3.78% to 4.48%, all priced at par. The 2025 bonds have a 4.83% coupon, priced at par. The 2030 bonds have a 5.65% coupon, also priced at par.

Proceeds will be used to fund infrastructure projects, including repairs and renovations to hospital facilities, improvements to city and county libraries, the restoration of roads and sidewalks, the refurbishment of parks and recreation facilities and maintenance for public buildings.

Scott & White deal prices

In other primary news, the Tarrant County Cultural Education Facilities Finance Corp. of Texas priced Wednesday $345.775 million in series 2010 hospital revenue bonds, said a pricing sheet. The bonds (A1/A/AA-) were sold for Scott & White Health Care.

JPMorgan was the senior manager.

The bonds are due 2011 to 2025 with term bonds due 2030, 2033, 2035, 2040 and 2045. The serial bonds have coupons from 1.5% to 5.25%. The 2030 bonds have a 5% coupon, priced at 97.514, and the 2033 bonds have a 5% coupon, priced at 95.634. The 2035 bonds have a 5.625% coupon, priced at 102.912. The 2040 bonds have a 5.25% coupon, priced at 96.049. The 2045 bonds have a split coupon. One of the 2045 bonds has a 5.5% coupon, priced at 97.712. The other has a 6% coupon, priced at 104.63.

Proceeds will be used to pay costs associated with constructing, acquiring and equipping Scott & White facilities, including an acute-care hospital in College Station, Texas, a children's hospital in Temple, Texas, and a hospital in Round Rock, Texas, as well as refund existing debt.

L.A. college sale ahead

Looking to upcoming offerings, the Los Angeles Community College District is expected to bring to market $1.2 billion in election of 2008 series 2010 G.O. bonds.

The deal includes series 2010D taxable bonds and series 2010E Build America Bonds. The exact breakdown of the tranches was not immediately available.

Citigroup Global Markets Inc. is the lead manager for the negotiated sale.

Proceeds will be used to install upgraded emergency lighting and security systems at all community colleges in the city; improve and add walkways, sidewalks and roads at the campuses; and construct energy infrastructure systems.

OSF preps deal

Also coming up, the Illinois Finance Authority is set to price $160 million in series 2010A revenue refunding bonds for OSF Healthcare System, said a preliminary official statement.

The bonds will be sold through lead manager Bank of America Merrill Lynch.

Proceeds will be used to reimburse OSF Healthcare for costs associated with the construction of system-owned hospital facilities as well as refinance and redeem the system's series 1985B variable-rate demand bonds, series 2001 variable-rate demand bonds and series 2007D revenue bonds.

Based in Peoria, Ill., OSF Healthcare operates hospitals and health-care facilities in Illinois, Michigan and Iowa.

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