Municipal yields seen lower; Princeton University prepares $250 million sale for Wednesday

By Sheri Kasprzak

New York, Jan. 15 - Municipal yields dropped by 1 to 2 basis points to close out a fairly busy week, market insiders said. The week ahead is even busier, with supply quickly building back up.

Yields were seen slightly better, one trader reported.

"Pretty much over the yield curve, we're firmer. Probably a basis point on the short and long ends, and maybe two in the middle," the trader said.

Looking to the week ahead, one market insider reached Friday said supply is stacking up once again, and the primary market seems to be back on track following the holiday season.

"Around the holidays, things level off, but we're only two weeks into 2010, and things are really moving already [in primary]," said the sellside source.

"I think [Build America Bonds] are probably partly responsible for the large supply and also for the size of the offerings. I think the subsidy is encouraging issuers that might not otherwise issue so much debt. The subsidy is a big draw."

Princeton plans $250 million sale

Amid the coming week's primary activity, the New Jersey Educational Facilities Authority is set to sell $250 million in series 2010B revenue bonds for Princeton University on Wednesday, said a notice of sale.

The bonds (Aaa/AAA/) will be sold on a competitive basis with Public Financial Management Inc. as the financial adviser.

The bonds are due 2012 to 2040.

Proceeds will be used to fund the maintenance of university facilities as well as the renovation of university buildings.

Indiana Bond Bank ahead

Also coming up, the Indiana Bond Bank plans to price $300 million in series 2010A advanced funding program notes, said a preliminary official statement.

The notes (/SP-1+/) will be sold through senior manager J.P. Morgan Securities Inc.

The notes are due Jan. 6, 2011.

Proceeds will be used to make a deposit to a warrant purchase fund.

Indiana Finance bonds price

In primary action during the week, the Indiana Finance Authority priced $288.97 million series 2010A state revolving fund program refunding bonds (Aaa/AAA/AAA), said a pricing sheet.

The bonds were sold Thursday through Bank of America Merrill Lynch and Citigroup Global Markets Inc.

The bonds are due 2014 to 2024 with 2% to 5% coupons.

Proceeds will be used to refund debt.

Sentara Healthcare prices

Elsewhere during the week, the Virginia Small Business Financing Authority priced Thursday $291.36 million in series 2010 health care facilities revenue and refunding bonds for Sentara Healthcare, said a pricing sheet.

The bonds were priced through Citigroup.

The bonds are due 2010 to 2021 with term bonds due 2025, 2030 and 2040. The serials have 2% to 5% coupons. The 2025 bonds have a 4.5% coupon priced at 99.324, and the 2030 bonds have a 4.625% coupon priced at 97.709. The 2040 bonds have a 5% coupon priced at 100.39.

Proceeds will be used to finance or refinance the construction, development, acquisition and equipment of a three-story addition to the Sentara Obici Hospital in Suffolk, Va. The remainder will be used to acquire the assets of the Potomac Hospital Corp. in Prince William, Va.

Aurora Health bonds sold

Also on Thursday, the Wisconsin Health and Educational Facilities Authority sold $225.99 million in series 2010A revenue bonds for Aurora Health Care Inc., said a pricing sheet.

The bonds (//A) were sold through Bank of America Merrill Lynch and Goldman, Sachs & Co.

The bonds are due 2011 to 2019 with term bonds due 2024, 2029, 2033 and 2039. The serial coupons range from 2.5% to 5%. The 2024 bonds have a 5.25% coupon priced at 98.516, and the 2029 bonds have a 5.5% coupon priced at 99.055. The 2033 bonds have a 5.625% coupon priced at 99.669, and the 2039 bonds have a 5.625% coupon priced at 97.54.

Proceeds will be used to construct, improve, equip and acquire health-care facilities.

Aurora Health Care is based in Milwaukee.

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