Municipals firm as activity picks up slightly; Los Angeles to bring $1.04 billion in TRANs

By Sheri Kasprzak

New York, June 30 - Municipals firmed again on Tuesday as the primary market saw some minor activity in a shortened week that some insiders referred to as "dead."

"It's been really very quiet," said one trader reached during the afternoon. "I suspect the rest of the week will be dead, too. We might have some stuff tomorrow, but Thursday's basically a free day."

In Tuesday's primary action, Bev Nawa, administrative officer for the Pennsylvania Higher Educational Facilities Authority, said the authority priced $123.64 million in series AJ state system of higher education revenue bonds. The full details of the sale were not immediately available, Nawa said, but Merrill Lynch & Co. Inc. was the winning bidder.

The bonds (Aa3/AA-/) are due 2010 to 2039, and RBC Capital Markets Corp. was the financial adviser.

Proceeds will fund campus revitalization projects, including the demolition of facilities and construction of new facilities, as well as maintenance of faculty buildings, dormitories, faculty apartments and a laboratory building.

Orange County to price Wednesday

In one of two large offerings planned for Wednesday, Orange County in California plans to bring its previously announced $235.765 million in series 2009 airport revenue bonds. A retail order period was conducted Tuesday, according to Courtney Wiercioch, spokeswoman for the county's airport.

Wiercioch said the county's financial team is pleased with the way the retail order period has gone.

The bonds (Aa3/AA-/AA-) will be sold through lead managers Citigroup Global Markets Inc. and Morgan Stanley & Co. Inc.

Proceeds will fund airport facilities and improvements and a debt service reserve fund.

The county seat is Santa Ana, Calif.

The other large deal planned for Wednesday is the $700 million offering of series 2009A general revenue bond anticipation notes from the New York State Thruway Authority.

L.A. plans $1.04 billion

Moving to upcoming sales, the City of Los Angeles plans to bring to market $1.039 billion in series 2009 tax and revenue anticipation notes July 9, according to a preliminary official statement released Tuesday.

The notes (MIG 1/SP-1+/F1+) will be sold on a negotiated basis with Goldman, Sachs & Co. as the lead manager.

The notes are due June 30, 2010.

Proceeds will be used to provide effective cash flow management for revenues and expenditures.

Also coming that week is a $600 million sale of revenue anticipation notes from the Metropolitan Transportation Authority of New York City, according to a preliminary official statement.

The notes (//F1+) will be sold through lead manager Barclays Capital Inc.

The notes are due Dec. 31, 2009.

Proceeds will be used to fund short-term operation and maintenance expenses.

Dasny deal ahead

Also coming up, the Dormitory Authority of the State of New York is expected to sell $136.776 million in series 2009 revenue bonds for the University of Rochester, said a preliminary official statement.

The deal includes $72.691 million in series 2009A bonds, $35.28 million in series 2009B bonds, $10.685 million in series 2009C bonds, $3.61 million in series 2009D bonds and $14.51 million in series 2009E bonds.

The bonds (Aa3/A+/) will be sold through lead managers Barclays Capital and J.P. Morgan Securities Inc.

The maturities have not yet been set.

Proceeds will be used to construct improvements to the university and to refund the university's series 1997A, 1998A and 2000A bonds.

Secondary firms again

Despite the quiet day, traders said the tone of the market remained fairly firm, and the short end of the yield curve may have even improved somewhat.

"Looks like yields on the short end are down maybe a basis point or two," noted one trader reached during the afternoon.

"It has been incredibly quiet."

Among the light trading volume was the Lower Colorado River Authority's recently priced revenue refunding bonds. The 5.625% 2039 bonds were seen trading near par Tuesday. The 5.25% 2029 bonds were seen at 5.135%, and the 5.5% 2033 bonds were seen at 5.371%.

Elsewhere, the Los Angeles Department of Water and Power saw its series 2009 revenue bonds moving as well. The 5% 2022 bonds were seen at 4.467%.

In other trading news, the Tuolumne Wind Project Authority of California's series 2009A revenue bonds were seeing some interest. The 3% 2013s were moving Tuesday afternoon at 3.1%.

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