Build America Bond activity on the rise; Miami University, Brookhaven, N.Y., plan sales

By Cristal Cody

Tupelo, Miss., Dec. 10 - Municipal bond spreads were slightly wider on Friday, and more Build America Bonds are expected to be issued in the week ahead as issuers meet the Dec. 31 deadline for the program.

"People aren't sure where rates are going in the near term," said Matt Fabian, managing director of Municipal Market Advisors. "Yields are high enough to attract buyers, but until some stability returns to the market, buyers won't be as enthusiastic."

A big calendar that includes about $5 billion of Build America Bond deals is expected in the week ahead.

"BABs really only have three weeks," Fabian said. "Issuance in December through today has been $8.7 billion and last month, a record month, was $16.7 billion."

Total issuance in the program is $114 billion so far, he said.

Build America Bond sales are expected in the upcoming week, including a $745 million offering from New York City, as well as deals from Columbus, Ohio, and the Milwaukee Metropolitan Sewerage District.

Miami to sell BABs

Another issuer announced an offering of Build America Bonds. On Friday, Miami University said it intends to sell $125 million of series 2010 general receipts revenue bonds.

The sale includes $104.445 million of series 2010A Build America Bonds and $20.555 million of series 2010B revenue bonds, according to a preliminary official statement.

The series 2010A bonds have serial maturities from 2017 through 2025 and term bonds due 2030 and 2035.

The series 2010B bonds have serial maturities from 2011 through 2016.

Morgan Stanley & Co. Inc. will manage the negotiated sale.

Proceeds will be used to fund improvements to student housing and dining facilities and the first phase of the construction of the Armstrong Student Center.

Brookhaven sale planned

Also coming up in new deals, the Town of Brookhaven and Suffolk County, N.Y., plan to sell $98.636 million of debt, according to a preliminary official statement.

The offering includes $80.056 million of series 2010 bond anticipation notes due Sept. 28, 2011 and $18.58 million of series 2010A public improvement bonds (Aa2/AA+/) with serial maturities from 2012 through 2031.

The bonds and notes will price through a competitive sale on Thursday.

Munistat Services, Inc. is the financial adviser.

Proceeds will be used to for various improvement projects and to acquire open space for parkland.

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