Muni yields improve on better Treasuries; Los Angeles Water and Power prices $668.13 million

By Sheri Kasprzak

New York, May 20 - Municipal yields, particularly for short bonds, were seen better on Thursday as Treasuries got a boost, said market insiders.

"Treasuries are gaining today, so we're seeing some improvement just following along," said one trader.

"The biggest improvement is short and intermediate, probably down by 3 or 4 basis points. Out long, maybe 2 basis points lower."

Meanwhile, investors continued to gobble up new offerings, but the flow of new deals was comparatively subdued on Thursday.

The Los Angeles Department of Water and Power led the action with a $668.13 million sale of series 2010 revenue bonds (Aa3/AA-/AA-).

The sale included $616 million in series 2010A Build America Bonds and $52.13 million in series 2010B tax-exempt bonds.

The 2010A bonds are due 2039 and 2040. The 2039 bonds have a 5.716% coupon, priced at par, and the 2040 bonds have a 6.166% coupon, priced at par.

The 2010B bonds are due 2011 to 2015 and 2018 to 2022 with 2% to 5% coupons.

Morgan Stanley & Co. Inc. was the senior manager.

Proceeds from the offering will be used to finance capital improvements.

East Baton Rouge prices

In other sales, the East Baton Rouge Sewerage Commission of Louisiana sold Thursday $373.36 million in series 2010 revenue bonds (Aa2/AA-/AA), said a term sheet.

The deal included $15.52 million in series 2010A tax-exempt bonds and $357.84 million in series 2010B Build America Bonds.

J.P. Morgan Securities Inc. and Citigroup Global Markets Inc. were the lead managers.

The 2010A bonds are due 2012 to 2014 with coupons from 3% to 5%. The 2010B bonds are due 2015 to 2025 with term bonds due 2030 and 2045. The serial coupons range from 2.973% to 5.253%, all priced at par. The 2030 bonds have a 5.887% coupon, priced at par, and the 2045 bonds have a 6.087% coupon, also priced at par.

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

NY urban development ahead

Looking to upcoming sales, the New York State Urban Development Corp. announced plans to price $503.18 million in series 2010A service contract revenue refunding bonds, said a preliminary official statement.

The offering includes $221.735 million in series 2010A-1 bonds and $281.445 million in series 2010A-2 bonds.

The bonds will be sold on a negotiated basis with Wells Fargo Securities LLC and Siebert Brandford Shank & Co. LLC as the senior managers.

The series 2010A-1 bonds are due 2011 to 2022, and the 2010A-2 bonds are due 2011 to 2022.

Proceeds will be used to refund the corporation's series 2008 bonds.

The corporation, based in New York, provides affordable housing for low- to moderate-income families and individuals.

Mount Sinai bonds to price

Also ahead, the Dormitory Authority of the State of New York is set to sell $336.75 million in series 2010A revenue bonds for Mount Sinai Hospital Obligated Group, according to a preliminary official statement.

The bonds will be sold through lead manager Goldman, Sachs & Co.

The bonds are due 2012 to 2020 with a term bond due 2026.

Proceeds will be used to refund the obligated group's series 2000A and 2000C bonds.

The Albany-based authority provides financing for various capital projects throughout the state. Mount Sinai is based in New York.

IDA deal planned

In other offerings, the Montgomery County Industrial Development Authority of Pennsylvania plans to bring to market $313.84 million in series 2010 FHA-insured mortgage revenue bonds, said a preliminary official statement.

The bonds will be sold on a negotiated basis through senior manager Goldman Sachs.

The bonds are due 2013 to 2020 with term bonds due 2025, 2030 and 2038.

The authority plans to use the proceeds to construct a new hospital in East Norriton, Pa.

Based in East Norriton, the authority provides loans to small businesses and qualified organizations.

California power sale

Also ahead, the Southern California Public Power Authority is set to price $276.93 million in series 2010 Canyon Power Project revenue bonds, said a preliminary official statement.

The sale includes $106.205 million in series 2010A bonds and $170.725 million in series 2010B Build America Bonds.

The bonds will be sold on a negotiated basis with Citigroup as the lead manager.

The 2010A bonds are due 2016 to 2028, and the 2010B bonds are due 2030 and 2040.

Proceeds from the sale will be used to finance the construction, development and acquisition of the Canyon Power Project as well as retire the authority's series 2009 notes.

Based in Pasadena, the authority is comprised of joint power agencies and finances the construction of new power plants and transmission lines.

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