Clark County Aviation floats $400 million; Lower Colorado River Authority sells $290 million

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, June 17 - Municipals continued their firming trend on Wednesday as primary action continued to dominate.

"There are a lot of new issues," said trader Anthony Shields, senior vice president with Grigsby & Associates.

Most of the new sales, Shields said, have gone very well.

"The DART deal did very well," he said about Tuesday's $1 billion revenue bond deal from Dallas Area Rapid Transit. The deal included $750 million in Build America Bonds.

"It's all new issues all the time [while] the secondary market is weak to nonexistent," he said.

The new issue volume will drop off on Thursday, he said just after the close Wednesday.

Investors will get a chance to catch their breaths and focus on where there is value, he said, particularly California general obligation bonds.

The California bonds are very cheap and have seen very thin bids recently, he said, as the spread has widened out terrifically.

The bonds have recently moved out to the 170 basis points range from the 120 bps range, he said.

The negative credit watch on the bonds by Standard & Poor's did not surprise many people, he said, but "there has definitely been some selling."

Clark County Aviation prices

Looking to Wednesday's primary action, the Clark County Department of Aviation in Nevada sold $400 million series 2009A airport system revenue notes (MIG 1/SP-1+/) at an all-in true interest cost of 0.85%, according to Alan Stewart, assistant director of finance.

The department had hoped for an all-in TIC closer to 0.70% or 0.75%, Stewart said, but still he said the deal went pretty well.

The bonds priced with a coupon of 2.5%.

Citigroup Global Markets Inc. acted as lead underwriter for the negotiated bonds due June 15, 2010.

Proceeds will be used to refinance the county airport's series 2008F notes.

The Clark County Department of Aviation is located in Las Vegas.

Lower Colorado River sale

Elsewhere in primary activity, the Lower Colorado River Authority of Texas brought to market Wednesday $290.005 million in series 2009 refunding revenue bonds, said Robbie Searcy, spokeswoman for the authority.

The sale included $171.455 million in series 2009 LCRA refunding revenue bonds (A1//A+) and $118.55 million in series 2009 Lower Colorado River Authority Transmission Services Corp. refunding revenue bonds (A2//A+).

The LCRA bonds are due 2010 to 2039 with coupons from 3% to 5.625% and yields from 1.25% to 5.72%. The average coupon came out to 5.43%.

The LCRA Transmission Services bonds are due 2016 to 2036 with coupons from 3.75% to 5.50% and yields from 3.85% to 5.68%. The average coupon for those bonds came out to 5.36%.

Goldman, Sachs & Co. was the senior manager for the sale.

Proceeds will be used to refund existing commercial paper notes and transmission contract revenue notes.

The authority has its headquarters in Austin, Texas.

Houston splits $150 million

Houston priced $150 million series 2009 tax and revenue anticipation notes in three $50 million tranches with an all-in TIC cost of 0.41237%, according to city spokesperson Janice Evans-Davis.

Citigroup won $50 million with an all-in TIC of 0.41018%, while J.P. Morgan Securities Inc. won $50 million with an all-in TIC of 0.41078% and Wachovia Securities LLC won $50 million with an all-in TIC of 0.41614%.

Eight bidders participated in the competitive auction for the notes due June 30, 2010.

First Southwest Co. acted as financial adviser for the deal.

Proceeds will be used to fund general expenses ahead of the collection of ad valorem tax.

Fulton County launches $120 million

Fulton County, Ga., priced $120 million general fund tax anticipation notes (MIG 1/SP-1+/F1+) at a net interest cost of 0.316774%, according to Walter Johnson, a Public Financial Management Inc. senior managing consultant.

Barclays Capital Inc. won the auction for the bonds due Dec. 31, 2009 over nine other bidders. Public Financial Management acted as financial adviser.

"I think it went extremely well," Johnson said, adding that the heavy issuance calendar is being digested easily.

"I think things are going well," he said.

The better-rated credits are still in demand, he said.

Some still question the ratings themselves, but "I don't think it's much of an issue," Johnson said.

"Everyone knows what to expect," he said. There are "not many surprises with the ratings."

Proceeds will be used to pay for general capital expenses ahead of the collection of taxes.

The Fulton County seat is Atlanta.

U of North Carolina sale ahead

Looking to upcoming sales, the University of North Carolina is expected to sell $126.735 million in series 2009 system pool revenue bonds later this month, said a preliminary official statement.

The sale includes $44.860 million in series 2009A bonds (Aa3), $21.060 million in series 2009B bonds (A1) and $60.815 million in series 2009C bonds (A3).

The bonds will be sold on a negotiated basis with Merrill Lynch & Co. Inc. as the senior manager.

The 2009A bonds are due 2010 to 2034 with a term bond. The 2009B bonds are due 2010 to 2034 with a term bond. The 2009C bonds are due 2010 to 2034 with a term bond.

Proceeds will be used to refund existing loans.

Secondary action light

Moving to the secondary market, volume remained fairly light, traders said, despite a continued trend of firming. Yields were seen 1 or 2 bps lower.

In specific trades, the Kansas Development Finance Authority's bonds for Adventist Health System were seen moving. The 5.75% 2034 bonds were seen at 5.748%.

Puerto Rico Sales Tax Financing Corp.'s recently priced sales tax revenue bonds were also in action. The 6% 2042 bonds were seen near par.

Elsewhere, the Metropolitan Washington Airports Authority's series 2009C bonds were seen moving. The 5% 2029 bonds were trading at 5.16%.

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