New Jersey Turnpike Authority sells upsized $1.8 billion revenue bonds; muni yields rise

By Cristal Cody

Tupelo, Miss., Dec. 8 - The New Jersey Turnpike Authority sold an upsized $1.8 billion of bonds in what is likely the biggest offering of the week, a source said.

The New Jersey Turnpike Authority sold the 7.102% series 2010A turnpike revenue Build America Bonds (A3/A+/A/) on Wednesday at par, a source said.

The bonds due 2041 priced at a spread of 262 basis points over Treasuries, lower than price talk of 287 bps, the source said. The deal was upsized from $1.5 billion.

"The real bellwether this week is the large New Jersey Turnpike issue," the source said. "They had enough interest in the deal; they were able to get a better price and upsize the deal."

The bonds were sold on a negotiated basis with Goldman Sachs & Co. and Citigroup Global Markets Inc. as the senior managers.

Proceeds will be used to pay for construction projects that are part of the authority's 10-year capital improvement plan.

The authority, based in East Brunswick Township, N.J., operates the New Jersey Turnpike.

Meanwhile on Wednesday, municipal bond yields were up following higher yields in Treasuries, while issuers continued to announce new offerings, sources said.

Massachusetts to sell notes

The Commonwealth of Massachusetts is set to price $390 million of special obligation refunding notes as part of the senior federal highway grant anticipation note program, according to a preliminary official statement.

The series 2010A notes (Aa1/AAA/AA+) have semiannual maturities from 2011 through 2015.

Jefferies & Co. is the senior manager.

Proceeds will be used to refund all of the series 1998A, 1998B and 2000A federal highway grant anticipation notes.

Yale-New Haven on tap

Also ahead, the State of Connecticut Health and Educational Facilities Authority intends to sell $100 million of revenue bonds for Yale-New Haven Hospital, according to a preliminary official statement.

The series M bonds (Aa3/A+/) have serial maturities from 2011 through 2025 and terms due 2030 and 2040.

Barclays Capital Inc. is the lead manager.

Proceeds will be used to finance and reimburse the costs of the expansion of the adult emergency department, for acquisition of equipment and for improvements to the hospital.

Monroe County Water ahead

The Monroe County Water Authority in Rochester, N.Y., announced plans to sell $94.5 million in water system revenue bonds, according to a preliminary official statement.

The deal includes $3.795 million in series 2010A revenue bonds and $90.705 million in series 2010B Build America Bonds.

The bonds will price through a negotiated sale managed by Jefferies & Co.

Proceeds will be used to finance the construction of a 50 million gallon per day water treatment plant.

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