Massachusetts Water prices $383.2 million with 4.32% TIC; Richland County schools sells $70 million

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, Feb. 4 - With billions in sales planned for the primary market Wednesday, led by a $950 million offering of general obligation bonds from the Los Angeles Unified School District, at least one municipal issuer was able to conclude its sales period earlier than expected due to strong retail demand.

The Massachusetts Water Resources Authority had been on schedule to price its $383.2 million in series 2009 revenue and refunding bonds Wednesday but was able to wrap up the deal a day early, said Ria Convery, spokeswoman for the authority.

"The sale was met with high demand from retail investors," Convery said in a statement released Wednesday.

Retail investors, Convery said, bought 63% of the offering.

"In fact, retail sales were so strong early in the day that we were able to offer the bonds to institutional investors in the afternoon and conclude the sale in one rather than the two days originally scheduled," the statement said.

The bonds (//AA) were split into $98 million of 2009 series A new money bonds to fund construction and $285.2 million of 2009 series B refunding bonds.

The series B bonds included $77 million to refund outstanding commercial paper and $208.2 million to refund existing bonds for savings.

The deal priced with a true interest cost of 4.32% when a TIC of 5.06% was expected as recently as January, the statement added.

Serial bonds priced with maturities from 2010 to 2029. Term bonds are due 2034 and 2039.

J.P. Morgan Securities Inc. and Citigroup Global Markets managed the negotiated sale.

Proceeds will be used for improvements to water infrastructure and to refund outstanding bonds.

The authority is based in Boston.

Richland County school bonds price

In other pricing news Wednesday, School District No. 2 of Richland County of South Carolina priced $70 million series 2009A G.O. bonds, said Bob Davis, district chief financial officer.

"We were very pleased with it," Davis said.

J.P. Morgan Securities was the bookrunner for the competitive issue.

The bonds, which are due from 2013 to 2023, priced with a TIC of 3.5% and an average coupon of 5%.

Proceeds will be used to construct, improve, renovate and equip school buildings and facilities.

The district is based in Columbia, S.C.

Rutgers sale planned

Moving to upcoming sales, Rutgers University in New Jersey is on deck to price $237.445 million in series 2009F G.O. bonds during the week of Feb. 9, according to a preliminary official statement released Wednesday.

The bonds (Aa3/AA/) will be sold on a negotiated basis with Morgan Stanley & Co. Inc.

The bonds are due 2010 to 2029 with term bonds due 2034 and 2039.

Proceeds will be used to refund the university's outstanding series 1997U and 1998A bonds as well as refinance the university's commercial paper. The remainder will be used to upgrade the university's electrical substation, improve landscaping on campus, expand the university's Institute for Health, Health Care Policy and Aging Research and add a student center to the university's Livingston campus.

Rutgers is based in New Brunswick, N.J.

Baltimore County to price Tuesday

In other upcoming sales for the Feb. 9 week, Baltimore County, Md., announced plans to issue $101.89 million in 2009 refunding series G.O. bonds Tuesday, said Ellen Kobler, a spokeswoman for the county.

The county expects to see yields from 0.55% to 2.66% on the long end, Kobler said.

The bonds are expected Tuesday, and although "there is always a chance that market conditions could cause the sale to be pulled ... the county will proceed with this refunding with a 3% overall NPV [net present value] savings," she said.

"Currently, the NPV savings is 6%, or approximately $7 million," she said.

The issue itself will be split into three tranches.

The county will sell $25.38 million in metropolitan district bonds and $28.37 million in consolidated public improvement bonds with maturities from 2009 to 2018. The $48.14 million in pension funding bonds carry maturities from 2009 to 2015.

Public Resources Advisory Group will act as financial adviser in the competitive sale.

Proceeds will be used to refund $25.435 million in metropolitan district bonds, $28.505 million in consolidated public improvement bonds and $49.975 million in pension funding bonds.

The Baltimore County seat is in Towson, Md.

Duke University deal

Later this month, the North Carolina Capital Facilities Finance Agency is expected to price $255 million in series 2009B revenue bonds for Duke University, said a preliminary official statement.

The bonds (Aa1/AA+/) will be sold on a negotiated basis with J.P. Morgan Securities and Barclays Capital Inc. as the senior managers.

The bonds are due Oct. 1, 2038.

Proceeds will be used to refund the university's outstanding commercial paper as well as reimburse the university for costs related to the construction and renovation of facilities at the West Campus.

Duke University is based out of Durham, N.C.

JEA's upcoming deal

On the horizon, JEA plans to price $128.31 million in series 2009 water and sewer revenue bonds, said a preliminary official statement.

The sale includes $45.87 million in series 2009A bonds and $82.44 million in series 2009B bonds.

The bonds will be sold on a negotiated basis in February through lead manager Goldman, Sachs & Co.

The 2009A bonds are due 2011 to 2029 with term bonds due 2034 and 2039. The 2009B bonds are due 2010 to 2019.

Proceeds will pay for the construction and expansion of the authority's water and wastewater system.

JEA is based out of Jacksonville, Fla.

Secondary gets better

Moving to the secondary market, the tone of the market continued to improve on Wednesday, with yields looking most improved on the long end.

"The long end is looking really good," said one trader based out of New York.

"It's feeling a lot better than last week. We are seeing pretty good demand on both the long and short end."

Looking to specific trades Wednesday, the recently freed-to-trade series 2009A road and street improvement bonds from East Baton Rouge, La., were in play Wednesday. The 5% 2024s were seen trading at around 4.94%. The bonds priced last Wednesday to yield 5.05%.

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