New York State Urban Development sells $1.1 billion; week packed with offerings, especially competitive sales

By Sheri Kasprzak

New York, Jan. 9 - Despite a lag in pricing action Friday, the pricing terms of the week's major offering were finalized and new deals keep sprouting up for the coming week.

The New York State Urban Development Corp. negotiated the terms on its $1.098 billion in series 2009 state personal income tax revenue bonds Friday, said a source at the issuer.

The offering had been slated for pricing Thursday, but the finalized terms were not determined until Friday afternoon.

The sale included series 2009A economic development and housing bonds and series 2009B state facilities and equipment bonds.

Coupons for the 2009A-1 serial bonds, which are due 2009 to 2023, range from 2% to 5%, and the yields range from 0.66% to 4.64%. The offering includes a term bond due 2028 with a 5% coupon to yield 5.1%.

The 2009A-2 bonds are due 2009 to 2010 with coupons from 3.5% to 4.32% and yields from 3% to 4.32% and also include term bonds due 2011 and 2018 with coupons from 5.64% to 6.5% and yields from 5.64% to 6.5%.

The 2009B-1 bonds are due 2010 to 2023 with coupons from 3.95% to 5% and yields from 1.06% to 4.64%. The 2009B-1 bonds also include term bonds due 2024, 2029, 2036 and 2038 with coupons from 5% to 5.25% and yields from 5.1% to 5.34%.

The 2009B-2 bonds are due 2010 with a 3.96% coupon, priced at par. The 2009B-2 bonds also include term bonds due 2011 and 2018. Coupons range from 5.24% to 6.45% and yields from 5.24% to 6.45%.

The bonds were sold through lead manager Citigroup Global Markets.

Proceeds will be used for community revitalization, technology projects under the New York State Technology and Development Program and grants and loans.

Chicago to sell $591 million

As market conditions continue to improve, some issuers are heading back to the competitive market and at least one sellside source thinks that makes sense.

"I think it's probably easier to go competitive now than it was a few weeks ago," he said Friday afternoon.

"The market has gotten a bit better, and I think retail investors in particular may be a little more interested. We're still seeing a lot of interest from institutional, but the retail investors are coming back too."

Among the upcoming sales for the week going competitive are a $252 million sale of series 2009 general obligation bonds from Chandler, Ariz., a $230.2 million sale of G.O.s from Fairfax County, Va., a $164.6 million sale of G.O.s from Guilford County, N.C., and a $114.41 million sale of G.O.s from Wichita, Kan. All of those sales are planned for Tuesday.

The State of Delaware also has a competitive offering planned for the week. The state intends to sell $252 million in G.O. bonds on Wednesday.

In negotiated sales, the City of Chicago is planning to bring to the table its previously announced $590.94 million in series 2008 G.O.s, which were originally planned for sale in December.

William Blair & Co. is the lead for the negotiated deal, and proceeds will fund infrastructure and transportation improvements, as well as grants to schools and nonprofits. The rest will be used to construct and repair municipal buildings and pay judgments against the city.

Another large offering planned for the week is a $300 million sale of series 2009S-3 building aid revenue bonds from the New York City Transitional Finance Authority.

Citigroup Global Markets is the lead manager for the bonds, which are due 2011 to 2039.

The authority will use the proceeds to pay a portion of some five-year school plans in the city.

LIPA's upcoming deal

Moving to deals coming up later this month, the Long Island Power Authority in New York is expected to price $250 million in series 2009A electric system general revenue bonds, said a preliminary official statement.

The bonds will be sold on a negotiated basis with Morgan Stanley as the senior manager.

Proceeds will be used to refund some outstanding bonds and to pay for certain capital expenditures.

Also ahead, the City of Irving in Texas plans to price $130 million in series 2009 combination tax and hotel occupancy tax revenue certificates of obligation, said a preliminary official statement released Friday.

The bonds (Aaa/AAA/) will be sold on a negotiated basis with J.P. Morgan Securities Inc. and Estrada Hinojosa & Co. as the senior managers.

The COOs are due 2013 to 2038.

Proceeds will be used for constructing, equipping and furnishing the City of Irving Convention Center and making a deposit to a debt service reserve fund.

Secondary finishes stronger

After a week of steady progress, the secondary market finished out firmer, said a trader reached in the afternoon.

"We're looking pretty good today," he said.

"Up a few basis points here and there. Volume could be better, but I'll always say that. It was a good week for us after several disappointing weeks."

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