Port Authority of New York and New Jersey, D.C. bring big deals; muni yields close unchanged

By Sheri Kasprzak

New York, Oct. 19 - A flurry of primary activity kept investors out of the secondary market on Tuesday and kept yields relatively flat, traders reported. The flood of new issues was led by the Port Authority of New York and New Jersey, which priced $850 million of consolidated bonds in two tranches.

"Trading activity is OK," said one trader.

"We're seeing things trade here and there, but there's a lot of focus on new issues right now, so maybe [investors] are getting pulled away from secondary. We're pretty flat overall."

The Port Authority deal included $425 million of 164th series bonds and $425 million of 165th series bonds.

The bonds (Aa2/AA-/AA-) are due 2040, and both tranches were priced to yield 175 basis points over comparable Treasuries.

A sellsider close to the offering said Tuesday that price talk on the deal had been around 165 bps over Treasuries on Monday when the retail order period was conducted.

Citigroup Global Markets Inc. was the senior manager.

Proceeds will be used to support capital expenditures connected to One World Trade Center and its retail components at the World Trade Center site.

D.C. brings TRANs

Another large offering on Tuesday came from the District of Columbia. The city priced $700 million in series 2011 general obligation tax and revenue anticipation notes, said a pricing sheet.

The notes (MIG 1/SP-1+/F1+) were sold competitively. Wells Fargo Securities LLC won the bid. Phoenix Capital Partners LLC and Public Resources Advisory Group were the financial advisers.

The 2% notes are due Sept. 30, 2011 and were priced at 101.513.

Calls to the issuer for comment were not immediately returned.

Proceeds will be used to finance general governmental expenses ahead of the collection of revenues during the fiscal year 2011.

New York Health prices

Meanwhile, the New York City Health and Hospitals Corp. came to market with $513.825 million in series 2010A health system revenue bonds, but retail investors were not impressed, said one sellsider.

"They really lost retail," he said.

"I think the yields just came too high, and retail wasn't willing to bite. They sold a bit [to retail], but I just think it went a little cheap. There's still some skepticism over health care [debt]."

The bonds are due 2013 to 2025 with a term bond due 2030. The serial coupons range from 2% to 5%. The 2030 bonds have a 4.125% coupon and a 5% coupon.

The senior managers were J.P. Morgan Securities LLC, Morgan Stanley & Co. Inc. and Citigroup.

The corporation intends to use the proceeds to finance the construction, renovation and acquisition of improvements to the corporation's facilities as well as to refund existing debt.

D.C. convention bonds sold

In other news, the Washington Convention and Sports Authority of the District of Columbia sold Tuesday $248.405 million in series 2010 revenue and refunding bonds (A1/A/A+) through Goldman, Sachs & Co., said a pricing sheet.

The sale included $66.525 million of series 2010A convention center hotel project tax-exempt recovery zone economic development revenue bonds, $110.07 million of series 2010B senior-lien dedicated tax revenue bonds and $71.81 million of series 2010C federally taxable bonds.

The 2010A bonds are due 2015, 2025, 2030 and 2039.

The 2010B bonds are due 2030 and 2040 with a 4.5% coupon and a 5% coupon, respectively.

The 2010C bonds are due 2015 to 2021.

The details of the 2010A and 2010C bonds were not immediately available.

Proceeds will be used to construct, acquire, develop and equip the Convention Center Hotel.

Triborough bonds ahead

Looking to Wednesday's offerings, the action will be led by the Triborough Bridge and Tunnel Authority of New York, which plans to sell $346.96 million in series 2010A general revenue bonds (Aa2//AA).

The bonds will be sold competitively with Lamont Financial Services Corp. as the financial adviser.

The sale includes $66.56 million in series 2010A-1 revenue bonds and $280.4 million in series 2010A-2 Build America Bonds. The 2010A-1 bonds are due 2011 to 2020, and the 2010A-2 bonds are due 2021 to 2040.

Proceeds will finance capital transportation projects and refinance the authority's general revenue bond anticipation notes.

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