Muni yields close down 1 to 3 bps across curve; Texas Transportation prepares $1 billion sale

By Sheri Kasprzak

New York, Sept. 16 - Municipal yields were slightly weaker on Thursday as another crop of offerings came to primary, said a market insider.

"Yields are off probably 1 to 3 bps across the whole curve," he said.

"The short end has been taking a beating, so that's where the biggest drop was. The long end has been doing OK, all things considered."

Meanwhile, the market is gearing up for a $1 billion offering from the Texas Transportation Commission. The commission is set to sell series 2010 Texas highway general obligation bonds either Tuesday or Wednesday, depending on market conditions, said a sellsider close to the deal.

"There are specific projects that do require funding, and market conditions are really good right now," the sellsider said in an interview Thursday.

"It's a great win-win situation for us."

J.P. Morgan Securities Inc. is the senior manager for the bonds (Aaa/AA+/AAA).

Proceeds will be used to pay for or reimburse the state for highway improvement costs.

NYC water bonds price

Thursday's primary action was led by the New York City Municipal Water Finance Authority, which sold $750 million in an upsized offering of series 2011AA water and sewer system second general resolution revenue bonds (Aaa/AA+/AA+). The authority had planned to bring $600 million.

The offering included $250 million in bonds due June 15, 2041 and $500 million in bonds due June 15, 2043, said a term sheet.

The 2041 bonds have a 5.79% coupon, and the 2043 bonds have a 5.44% coupon. Both priced at par.

Barclays Capital Inc. was the senior manager.

Proceeds will be used to repay existing commercial paper notes and to make a deposit to the authority's construction fund.

SCPPA brings bonds

Elsewhere, the Southern California Public Power Authority priced Thursday $138.325 million in series 2010 revenue bonds (/AA-/AA-), said a pricing sheet.

The bonds were sold through Morgan Stanley & Co. Inc.

The sale included $96.775 million in series 2010A bonds and $41.55 million in series 2010B taxable bonds.

The 2010A bonds are due 2011 to 2030 with 2% to 5% coupons. The 2010B bonds are due July 1, 2035 and have a 5.921% coupon priced at par.

The proceeds will be used to finance the acquisition of the Linden Wind Energy project in Klickitat County, Wash., as well as refund the authority's series 2009A bonds.

The Pasadena-based authority operates and maintains electric energy projects.

Dasny prices $133.49 million

In other pricing news, the Dormitory Authority of the State of New York sold Thursday $133.485 million in series 2010 qualified school construction state personal income tax revenue bonds, said a pricing sheet.

The bonds (//AA) were sold through Goldman, Sachs & Co.

The bonds are due Sept. 15, 2027 and have a 5.051% coupon priced at par.

Proceeds will be used to finance capital projects at various school districts in the state, including health and safety improvements, technology upgrades, new school construction and repairs to existing facilities.

Ohio Water sells bonds

In one of several recent offerings, the Ohio Water Development Authority brought to market $145.29 million in series 2010C water pollution control loan fund refunding revenue bonds on Thursday, said a partial pricing sheet.

The bonds (Aaa/AAA/) are due 2018 to 2022 with 2.5% to 5% coupons. The full pricing data was not immediately available.

JPMorgan was the senior manager.

The proceeds will be used to refund the authority's series 2005B water quality bonds.

On Thursday, the authority also announced plans to come to market with $123.73 million in series 2010 drinking water assistance fund refunding bonds through Goldman Sachs. The offering includes $108.08 million in series 2010C leverage series bonds and $15.65 million in series 2010D state match series bonds.

Proceeds will be used to refund series 2002, 2004, 2005B and 2008 bonds.

The Columbus-based authority provides financing for drinking water, wastewater and sewage projects.

Kalamazoo sells Bronson bonds

The Kalamazoo Hospital Finance Authority of Michigan sold Thursday $114.26 million in series 2010 revenue refunding bonds for Bronson Methodist Hospital, said a pricing sheet. The authority had planned to sell $124.455 million.

The bonds (A2) were sold through Ziegler Capital Markets Group.

The bonds are due 2020, 2025, 2030 and 2036. Coupons range from 4.25% to 6%.

Proceeds will be used to refund the authority's outstanding series 1998 revenue refunding and improvement bonds and its series 2009 revenue refunding bonds, as well as reconstruct, remodel and equip hospital facilities and terminate all or a portion of interest-rate hedge agreements related to the series 2006 and 2009A bonds.

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