Yields climb, give back Wednesday gains; Cook County, Ill., brings $480.28 million G.O. bonds

By Sheri Kasprzak

New York, June 10 - Municipal yields were markedly weaker on Thursday, with yields seen higher by 3 to 5 basis points, said market insiders.

"I think we're just giving back whatever we gained yesterday [Wednesday]," said a trader.

"Stocks got a boost, they were down yesterday, and we got the benefit of that, but today it's a different story. I wouldn't say there's anything out there to be really concerned about. It's a correction, I would say."

Meanwhile, primary action boomed, led by a massive sale from Cook County in Illinois. The county priced at least $480.28 million in series 2010 general obligation bonds Thursday, according to pricing sheets.

"We're still in the process of pricing," said a sellsider reached about the deal.

"I would say so far, so good. Given that we're kind of in a pricing frenzy right now, we're doing pretty well. There's decent interest."

The county sold $400.28 million in series 2010A G.O. refunding bonds and $80 million in series 2010C taxable G.O. bonds. The offering was part of a larger sale that also included $331.895 million in series 2010D and 2010E bonds. The terms for the 2010D and 2010E bonds were not available Thursday evening.

The 2010A bonds are due 2022 to 2024 with a 2033 term bond. The bonds have 5.25% coupons across the board.

The 2010C bonds are due 2011 to 2013 with 1.430% to 2.503% coupons, all priced at par.

Morgan Stanley & Co. Inc. was the senior manager for the 2010A and 2010C bonds. The lead manager for the 2010D and 2010E bonds was Loop Capital Markets LLC.

Proceeds will be used to refund existing debt, fund a portion of the county's pension plan, renovate the John H. Stoger Jr. Hospital and other hospitals and clinics, construct and equip the county's public safety facility, improve and renovate county buildings and administrative offices as well as purchase county equipment.

Chicago is the county seat.

Harris sells $260 million

In other pricing news, Harris County, Texas, sold on Thursday $260 million in series 2010 refunding bonds, said a pricing sheet.

The offering included $100 million in series 2010A unlimited tax road refunding bonds and $160 million in series 2010B permanent improvement refunding bonds.

The full pricing terms were not available Thursday evening. The 2010A bonds are due 2016 to 2024 with coupons from 4% to 5%. The 2010B bonds are due 2016, 2018 to 2021 and 2023 to 2024. The 2016 bonds have a 4% coupon, the 2018 to 2021 coupons range from 4% to 5%, and the 2023 to 2024 bonds have 5% coupons.

The bonds were sold through Jefferies & Co. and Mesirow Financial Inc.

Proceeds will be used to refund existing debt.

The county seat is Houston.

Connecticut prices bonds

Elsewhere, the State of Connecticut priced Wednesday $600 million in series 2010 G.O. obligation bonds, said a pricing sheet released Thursday.

The offering included $200 million in series 2010B G.O. bonds and $400 million in series 2010C G.O. refunding bonds.

The 2010B bonds are due 2011 and 2014 to 2018. The 2010C bonds are due 2012 to 2021.

The 2010B bonds have coupons from 1.5% to 5%, and the 2010C bonds have coupons from 2% to 5%.

J.P. Morgan Securities Inc. was the senior manager.

Proceeds will be used to finance capital expenditures and refund existing debt.

Genesis prices deal

Also on Thursday, the Iowa Finance Authority sold $90.995 million in series 2010 health-care revenue bonds for Genesis Health System, said a pricing sheet.

The bonds (A1) were sold through senior manager Piper Jaffray & Co.

The bonds are due 2011 to 2021 with a term bond due 2026. Serial coupons range from 3% to 5%. The 2026 bonds have a 5% coupon, priced at 99.345.

Proceeds will be used to reimburse the health-system for improvements to be completed in 2011 and to refund the system's series 1997 and 2000 bonds.

The authority, based in Des Moines, finances economic development projects and funds affordable housing projects.

The health system is based in Davenport, Iowa.

Kentucky loan bonds ahead

In upcoming offerings, the Kentucky Higher Education Student Loan Corp. is set to price $224.915 million in series 2010-1 Libor floating-rate student loan revenue 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 senior manager.

The sale includes $75.05 million in class A-1 bonds, which are due May 1, 2020, and $149.865 million in class A-2 bonds, which are due May 1, 2034.

Proceeds from the sale will be used to finance student loans to qualified individuals.

Based in Louisville, the corporation makes, finances, services and collects student loans.

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