Washington airports sale postponed; New Jersey Economic Development sells $750 million bonds

By Sheri Kasprzak

New York, May 12 - Municipal yields were flat across the yield curve on Wednesday amid light trading action, market insiders reported.

The same turbulence that is keeping investors from biting in the secondary market may be responsible for a major offering being postponed Wednesday.

The Metropolitan Washington Airports Authority pulled its $400 million sale of series 2010 Dulles Toll Road revenue bonds and Dulles Metrorail and capital improvement revenue bonds, which were set to price Wednesday.

"From what I've heard, it was postponed, but it might be priced this week," said one sellsider asked about the deal.

"It looks like they're shying away from the market just because of some volatility out there. It's really no big surprise. Buyers are skittish, so they probably took this into consideration. I'm not sure when exactly it will price, but I've heard it might be later in the week or early next week."

Citigroup Global Markets Inc. and Morgan Stanley & Co. Inc. are set to bring the bonds to market.

Proceeds will fund road improvements and capital improvements for the Dulles Metrorail project at the Washington Dulles International Airport.

N.J. school bonds price

Looking to what did price on Wednesday, the New Jersey Economic Development Authority sold $750 million in series 2010 school facilities construction Build America Bonds, said a pricing sheet.

The bonds (Aa3/AA-/) were sold through Bank of America Merrill Lynch.

The bonds are due June 15, 2013 and priced at Libor plus 100 basis points.

Proceeds from the sale will be used to construct schools, with a portion to be hedged with an existing interest rate swap with Royal Bank of Canada.

The Trenton-based authority provides financing to qualified corporations and entities.

Virginia road bonds sold

In other primary news, the Commonwealth Transportation Board of the Commonwealth of Virginia priced $492.665 million in series 2010A transportation capital projects revenue bonds, said a pricing sheet.

The bonds (Aa1/AA+/AA+) were sold competitively with Goldman, Sachs & Co. winning the bid.

The offering included $85.515 million in series 2010A-1 bonds and $407.15 million in series 2010A-2 bonds.

The 2010A-1 bonds are due 2011 to 2016 with coupons from 2.5% to 5%. The 2010A-2 bonds are due 2017 to 2024 with a term bond due 2035. The serial coupons range from 3.85% to 4.7%. The 2035 bonds have a 5.35% coupon, priced at par.

Proceeds will fund transit capital projects, match federal highway funds and finance highway capital projects throughout the state.

The board is based in Richmond.

Tennessee Housing sells bonds

Also during the day, the Tennessee Housing Development Agency sold $74.71 million in series 2010 housing finance program bonds, said a pricing sheet.

The sale included $56.86 million in series 2010A-1 non-AMT bonds and $17.85 million in series 2010A-2 AMT bonds.

The 2010A-1 bonds are due 2011 to 2021 with term bonds due 2024 and 2027. The serial coupons range from 0.6% to 4%, all priced at par. The 2024 bonds have a 4.2% coupon, priced at par, and the 2027 bonds have a 5% coupon, priced at 117.469.

The 2010A-2 bonds are due July 1, 2025 with a 4.2% coupon, priced at par.

RBC Capital Markets Corp. was the senior manager.

The proceeds will be used to finance housing loans.

The Nashville-based agency makes housing loans to qualified homebuyers.

Massachusetts DOT eyes deal

Moving to upcoming sales, the Massachusetts Department of Transportation is expected to sell $1.102 billion in series 2010 metropolitan highway transportation system revenue bonds, said a preliminary official statement.

The offering is comprised of $207.665 million in series 2010A-1 and 2010A-2 variable-rate demand obligations, which include $100 million in series 2010A-1 bonds and $107.665 million in series 2010A-2 bonds, and $893.865 million in series 2010B bonds.

J.P. Morgan Securities Inc. is the lead manager for the 2010A bonds. Citigroup is the senior manager for the 2010B bonds.

The 2010A bonds are due Jan. 1, 2037. The 2010B bonds are due 2011 to 2027 with term bonds due 2032 and 2037.

Proceeds will be used to offset payments under a swap agreement entered into with UBS Financial Services Inc. and refund the department's series 1997 bonds.

The Boston-based Massachusetts Department of Transportation oversees the roads, public transit, aeronautics and transportation licensing for the commonwealth.

Louisiana sewer bonds ahead

In other upcoming deals, the East Baton Rouge Sewerage Commission of Louisiana plans to price $375.375 million in series 2010 revenue bonds, said a preliminary official statement.

The sale includes $15.52 million in series 2010A tax-exempt bonds and $359.855 million in series 2010B Build America Bonds.

The bonds (Aa2/AA-/AA) will be sold through senior managers JPMorgan and Citigroup.

The 2010A bonds are due 2011 to 2014. The 2010B bonds are due 2015 to 2025 with term bonds due 2030 and 2045.

Proceeds will be used to improve, expand, acquire and construct improvements to the sewerage system in East Baton Rouge.

The commission provides sewerage treatment services for the parish of East Baton Rouge.

Texas school sale planned

The North Texas Higher Education Authority Inc. is set to sell $207.2 million in series 2010-1 student loan revenue floating-rate bonds, said a preliminary official statement.

The bonds (/AAA/AAA) will be sold on a negotiated basis with Bank of America Merrill Lynch as the lead manager.

The offering includes $113.96 million in class A-1 bonds, which are due July 1, 2019, and $93.24 million in class A-2 bonds, which are due July 1, 2030.

Proceeds will be used to fund student loans.

The authority, based in Arlington, grants loans to qualified students throughout northern Texas.

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