Yields drop again; Utah sells $1.04 billion; Texas Transportation details $977.81 million sale

By Sheri Kasprzak

New York, Sept. 23 - Municipal yields dropped for the third straight session, market insiders reported, assisted in part by Treasuries, which were slightly improved on Thursday as well.

"There's just so much data out there right now," said one trader reached Thursday afternoon.

"It seems like every time new information is released, Treasuries rally, yields drop, muni yields follow. That's been the basic pattern for the past week. I doubt it will last, and yields are only down by a basis point or two anyway."

Meanwhile, investors continued to feast upon a huge slate of offerings, including a $1.036 billion sale of general obligation bonds from the State of Utah. The state sold the bonds in two tranches Thursday: $413.8 million in series 2010A tax-exempts and $622 million in series 2010B Build America Bonds.

The bonds (Aaa/AAA/AAA) were sold through Goldman, Sachs & Co. and J.P. Morgan Securities Inc.

The 2010A bonds are due 2012 to 2017 with 1.75% to 5% coupons, and the 2010B bonds are due 2019 to 2021 with a term bond due 2025. The 2010B serial coupons range from 3.189% to 3.369%, all priced at par, and the 2025 bonds have a 3.539% coupon priced at par.

Proceeds will be used to fund ongoing highway construction projects and refund existing debt.

Texas Transportation details sale

On Wednesday, the Texas Transportation Commission brought to market $977.81 million in series 2010 Texas highway G.O. bonds.

Kelli Petras, spokeswoman for the commission, said Thursday that the timing of the issuance was dictated by the award of projects to be funded by the proceeds.

The offering included $815.42 million in series 2010A Build America Bonds and $162.39 million in series 2010B tax-exempt bonds.

The all-in true interest cost came in at 2.885%, Petras reported.

The 2010A bonds are due 2020 to 2026 with term bonds due 2033 and 2040. The serial coupons range from 3.203% to 4.273%, all priced at par. The 2033 bonds have a 4.631% coupon priced at par, and the 2040 bonds have a 4.681% coupon priced at par.

The 2010B bonds are due 2012 to 2018 with coupons from 2% to 5%.

The commission plans to complete improvements to Interstate 35 in Central Texas, Interstate 45 in Houston, Houston's Interstate 610/U.S. 290 Interchange and Loop 375 in El Paso, among others, Petras told Prospect News.

U Dub brings bonds

In the Pacific Northwest, the University of Washington priced $165.005 million in series 2010 general revenue bonds, said a pricing sheet.

The bonds (Aaa/AA+/) were sold through Barclays Capital Inc.

The sale included $20.265 million in series 2010A tax-exempt bonds and $144.74 million in series 2010B Build America Bonds.

The 2010A bonds are due 2011 to 2025 with a term bond due 2031. The coupons range from 2.5% to 5%. The 2031 bonds have a split maturity with a 4% coupon priced at 98.255 and a 5% coupon priced at 110.949.

The 2010B bonds are due 2019 to 2026 with term bonds due 2033 and 2040. The coupons range from 3.308% to 4.208%, all priced at par. The 2033 bonds have a 4.897% coupon priced at par, and the 2040 bonds have a 4.997% coupon priced at par.

Proceeds will be used to repay commercial paper notes issued to finance or refinance capital improvements to university facilities. The renovations included improvements to the university's Health Sciences building, the development of the Foster School of Business, the development of the WDS Foundation Building for Early Childhood Oral Health, the expansion of the University Medical Center, the implementation of a housing and food services master plan, the reconstruction of Balmer Hall and the design and reconstruction of facilities at the University of Washington - Tacoma.

The university is based in Seattle.

Tennessee housing bonds sold

Down South, the Tennessee Housing Development Agency came to market Thursday with $120.7 million in series 2010 homeownership program bonds, said a term sheet.

The offering included $25 million in series 2010-1A non-AMT bonds, $6.475 million in series 2010-1B non-AMT bonds and $89.225 million in series 2010-1C AMT bonds.

The 2010-1A bonds are due 2014 to 2022 with a term bond due 2025. The coupons range from 1.45% to 3.45%, all priced at par. The 2025 bonds have a 3.75% coupon priced at par.

The 2010-1B bonds are due 2011 to 2017 with coupons from 0.35% to 2.45%, all priced at par.

The 2010-1C bonds are due 2011 to 2021 with a term bond due 2025. The serial coupons range from 1.1% to 4.125%, all priced at par. The 2025 bonds have a split maturity with a 3.75% coupon priced at par and a 4.5% coupon priced at par.

Bank of America Merrill Lynch was the senior manager for the bonds (Aa1/AA+/).

Proceeds will be used to finance mortgage loans.

Based in Nashville, the agency makes mortgage loans to low- to moderate-income Tennessee residents.

Oklahoma loan bonds ahead

Out on the horizon, the Oklahoma Student Loan Authority is set to sell $232 million in series 2010A student loan bonds and notes, said a preliminary official statement.

The sale includes $132.545 million in series 2010A-1 tax-exempt Libor floating-rate bonds due Sept. 3, 2024 and $99.455 million in series 2010A-2 tax-exempt non-AMT Libor floating-rate bonds due Sept. 4, 2040.

The bonds (/AAA/AAA) will be sold on a negotiated basis with Bank of America Merrill Lynch as the underwriter.

Proceeds from the sale will be used to refund the authority's series 1996 bonds and fund the initial specified debt service reserve balance.

Based in Oklahoma City, the authority provides and services student loans.

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