University of Arizona, Nassau County bring bonds; munis weaken ahead of big primary activity

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, April 28 - Tuesday marked a rare weak day for municipals ahead of two fairly big days of primary action, but market insiders were not particularly moved.

"I don't really see anything that indicates a problem," said one trader reached in the afternoon. "We're only off a couple of basis points. We've been on an upswing for a few weeks now, so it's only natural that we'd hit a wall eventually."

There was some optimism in the market Tuesday.

Nassau County, N.Y., debt manager Jeff Nogid said he feels good about the near-term future in the municipal market.

Many are concerned about a growing bubble in both the Treasury and municipal markets, but at least in the short term, the market will continue to digest even the major issues, he said.

Supply will be spread thinner as municipalities figure out how they will take advantage of Build America Bonds, he said.

"Now there's a choice," he said, and "it's a positive dynamic for the near term."

U of Arizona bonds

Tuesday's primary activity was led by the Board of Regents of the University of Arizona, which sold $215.455 million in series 2009A revenue bonds (Aa3/AA/).

The bonds were priced with an average rate of 4.62%, university spokesman Paul Allvin said Tuesday afternoon.

The pricing sheet for the sale was not immediately available.

The bonds are due 2012 to 2029 with term bonds due 2034 and 2039.

Citigroup Global Markets Inc. was the senior manager.

Proceeds will be used to construct new residence halls and renovate existing halls at the Tucson-based university.

Nassau nets $105 million

Nassau County in New York priced $105 million series 2009 general obligation bonds (A2/A+/A+) in two tranches Tuesday, according to Nogid.

"It went exceptionally well," Nogid said. "There was a good response."

The deal priced at 30 to 40 bps to MMD tighter than expected, said Nancy Winkler, managing director at financial adviser Public Financial Management Inc.

Public Financial Management had been expecting a spread near 70 to 80 bps over MMD, but ahead of the close, the deal seemed to come in closer to a 43 to 45 bps spread, she said.

"The market recognized the value," Nogid said.

With little Nassau County general obligation paper in the market, "it gave investors an opportunity to buy another New York name ... and I think they were rewarded," he said.

Eight bids were placed for the $90 million series A bonds, which priced with a true interest cost of 4.115%. The series A bonds carry maturities from 2011 to 2029.

Two bids were placed for the $15 million series B bonds, which priced with a TIC of 4.636%. The series B bonds carry maturities from 2011 to 2034.

Citigroup won both competitive auctions.

Proceeds will be used to refinance a portion of county's outstanding bond anticipation notes.

The Nassau County seat is Mineola, N.Y.

Sacramento MUD ahead

Looking to upcoming offerings, the Sacramento Municipal Utility District of California is set to price $200 million in series 2009V electric revenue bonds in the coming week, said a preliminary official statement.

The bonds (A1/A+/A) are set to price on a negotiated basis through lead managers Goldman, Sachs & Co. and Merrill Lynch & Co. Inc.

The bonds are due May 15, 2036.

Proceeds will be used to construct improvements to the district's electrical system.

Also ahead, the State of Texas is expected to sell $162.79 million in series 2009B water financial assistance G.O. bonds, said a preliminary official statement. The offering is set to price May 5, said a sellside source connected to the deal.

The bonds (Aa1/AA/AA+) will be sold on a negotiated basis with Morgan Stanley & Co. Inc. as the senior manager.

The bonds are due 2010 to 2029.

Proceeds will be used to construct dams, water storage facilities and other water projects.

N.C. Eastern Municipal

The North Carolina Eastern Municipal Power Agency announced plans to issue $70.555 million in series 2009A power system revenue bonds, according to treasury manager Susan Ingram.

The bonds will carry serial maturities from 2010 to 2019 with $34.56 million term bonds due from 2020 to 2026; however, the issue date is subject to market conditions, Ingram said.

The agency expects the bonds to price on May 6 but will wait to price if the market shows little interest.

The deal will "probably not" be pulled entirely but will move to a day-to-day schedule if conditions are unfavorable, she said.

Citigroup, Banc of America Securities LLC, Morgan Stanley and Wachovia Bank NA will act as underwriters for the negotiated deal.

Proceeds will be used for maintenance and expansion of agency facilities as well as the establishment of a reserve fund.

The agency is located in Raleigh, N.C.

Atlanta plans $75.23 million

Atlanta announced that it will offer $75.23 million in series 2009 G.O. refunding bonds, according to a preliminary offering statement.

The bonds will carry serial maturities from 2010 to 2023.

Loop Capital Markets LLC and Wachovia Bank will act as underwriters for the negotiated deal.

Proceeds from the sale will be used to refund $79.36 million of the city's series 1998 bonds.

MEAG sells $200 million

In recent pricing news, the Municipal Electric Authority of Georgia brought $200.96 million in series 2009A bond anticipation notes, said an official statement.

The notes (MIG 1/SP-1+/F1+) were sold Friday through lead manager Goldman Sachs.

The notes are due May 25, 2010 and were priced with a 1.5% coupon to yield 0.6%.

Proceeds will be used to construct the authority's non-power purchase agreement projects.

South Carolina authority deal

Elsewhere in recent pricing news, the South Carolina Jobs-Economic Development Authority sold $112 million in series 2009B hospital refunding and improvement revenue bonds for AnMed Health, said an official statement.

The bonds (/A+/AA-) were sold Monday on a negotiated basis with Citigroup and BB&T Capital Markets Inc. as the senior managers.

The bonds are due 2012 to 2022 with term bonds due 2029 and 2038.

The serials have coupons from 3.5% to 5% and yields from 2.78% to 5.05%. The 2029 bonds have a 5.375% coupon to yield 5.55%, and the 2038 bonds have a 5.5% coupon to yield 5.75%

Proceeds will be used to fund capital projects and refund AnMed's series 2003B bonds.

In reoffering, the bonds were seen trading Tuesday. The 5.375% 2029s were seen up by as much as 27 bps during the course of trading. The 2029 bonds were seen at 5.374% in the afternoon. The 5.5% 2038s were seen trading around par in the afternoon after pricing at 5.75%, and the 4.5% 2020s were also seen trading around par after pricing at 4.78%.

AnMed Health is based in Anderson, S.C.

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