Municipals lose ground as Treasuries slip; Metropolitan Transportation brings $596.57 million

By Sheri Kasprzak

New York, Oct. 6 - Municipal yields made some gains on Tuesday, possibly responding to weakness in the Treasury market, said one trader.

"It couldn't last forever," the trader said of the market's recent strength.

"Treasuries were off today, so we seem to be moving in line with them."

Secondary trading volume remained fairly light, said the trader.

Amid the action, American Municipal Power Inc.'s series 2009C taxable revenue bonds were seen in action. The 6.553% 2039 bonds were seen at 6.318%. American Municipal's series 2009A tax-exempts were also in play. The 4.25% 2019s were trading at 3.511%.

In primary activity, the Metropolitan Transportation Authority in New York City priced Tuesday $596.565 million in series 2009A transportation revenue bonds, said a term sheet.

The sale included $500 million in series 2009A-1 Build America Bonds and $96.565 million in series 2009A-2 tax-exempt bonds.

The 2009A-1 bonds are due 2018 to 2020 with term bonds due 2022 and 2039. The serials have coupons from 4.813% to 5.013%, all priced at par. The 2022 bonds have a 5.113% coupon, priced at par, and the 2039 bonds have a 5.871% coupon, also priced at par.

The 2009A-2 bonds are due 2010 to 2017 with coupons from 2.5% to 5%.

Citigroup Global Markets Inc. and Merrill Lynch & Co. Inc. were the lead managers for the series 2009A-1 bonds, and Ramirez & Co. Inc. and Merrill Lynch were the senior managers for the 2009A-2 bonds.

Proceeds will be used to fund transit and commuter projects.

Cedars-Sinai bonds price

Elsewhere, the California Health Facilities Financing Authority sold Tuesday $535 million in series 2009 revenue bonds for the Cedars-Sinai Medical Center, said a term sheet.

The bonds (A2//A+) were sold through lead managers Merrill Lynch and Goldman, Sachs & Co.

The bonds are due 2010 to 2024 with term bonds due 2029, 2034 and 2039. The coupons on the serial bonds range from 3% to 4.25%. The 2029 bonds have a 4.625% coupon, priced at 98.652, and the 2034 bonds have a 5% coupon, priced at par. The 2039 bonds have a 5% coupon, priced at 99.226.

Proceeds will be used to construct, equip and renovate health facilities operated by Cedars-Sinai, which is located in Los Angeles.

North Carolina brings $371.92 million

Down south, the State of North Carolina priced $371.92 million in series 2009A general obligation refunding bonds Tuesday, said a pricing sheet.

The bonds (Aaa/AAA/AAA) were sold competitively. J.P. Morgan Securities Inc. was the winning bidder with a 2.26% true interest cost.

The bonds are due 2010 to 2020 with coupons from 3.5% to 5%.

Proceeds will be used to refund the state's series 1999 school building bonds, series 2001A public improvement bonds, series 2003 G.O. highway bonds, series 2004 G.O. highway bonds, series 2006A G.O. higher education bonds and series 2007A public improvement bonds.

Minnesota sells $60.4 million

In other pricing news, the State of Minnesota sold Tuesday $60.4 million in series 2009 911 revenue bonds through senior managers Jefferies & Co. and Piper Jaffray & Co.

The co-managers for the bonds (//AA-) were Cronin & Co. Inc. and Siebert Brandford Shank & Co. LLC.

The bonds are due 2010 to 2025 with coupons from 2% to 5%.

Proceeds will be used to fund the state's emergency radio infrastructure.

Gwinnett sewerage bonds to price

Looking to Wednesday's calendar of offerings, the Gwinnett County Water and Sewerage Authority of Georgia plans to sell $271.775 million in series 2009 revenue bonds on a competitive basis.

The sale includes $247.82 million in series 2009A revenue bonds, which are due 2010 to 2028, and $23.955 million in series 2009B Build America Bonds, which are due 2028 to 2029.

Proceeds will be used to fund improvements and extensions to the county's water and sewer system as well as refund the authority's series 2004 bonds.

The county seat is Lawrenceville, Ga.

Also coming up Wednesday, the Lycoming County Authority of Pennsylvania plans to price $172 million in series 2009A health system revenue bonds for the Susquehanna Health System.

The bonds (/AAA/AA) will be sold through Barclays Capital Inc. and M&T Securities Inc.

Proceeds will be used to construct a new energy service center at Williamsport Hospital, renovate Muncy Valley Hospital and refund the authority's series 1995 bonds.

The health system is based in Williamsport, Pa., which is the seat of Lycoming County.

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