Washington brings upsized $831.19 million in G.O. bonds; Maryland sells $433 million in bonds

By Sheri Kasprzak

New York, July 28 - Municipal yields remained mostly unchanged on Wednesday amid heavy primary activity. One trader said secondary trading was very light, possibly because investors were distracted by high-rated new deals.

"There's a lot of triple-A [rated] stuff coming to market this week," he said.

"That could possibly be pulling some interest away from secondary. We are absolutely flat today. Not a lot of activity on this side."

Meanwhile, the day's big primary offering came from the State of Washington, which sold $831.19 million in series 2011 various-purpose general obligation and refunding bonds. The state had planned to sell $720.34 million of the bonds.

"Saving nearly $650 million on debt service costs allows us to do more with the money entrusted to us by the taxpayers - a lot more. It's really that simple," James McIntire, the state's treasurer, said in a statement.

The offering includes $347.295 million in series 2011A various-purpose G.O. bonds, $118.29 million in series 2011T taxable G.O. bonds and $365.605 million in series 2011R-A various-purpose G.O. refunding bonds, said a pricing sheet.

The 2011A bonds are due 2020 to 2035 with coupons from 4.5% to 5%. All but the 2020 bonds were not formally reoffered. The 2011R-A bonds are due 2013 to 2025 with 5% coupons. The 2011T bonds are due 2018 to 2020 with coupons from 3.44% to3.79%, all priced at par.

The bonds (/AA+/AA+) were sold competitively with Barclays Capital Inc. winning the 2011A bonds with a 4.206% true interest cost. Citigroup Global Markets Inc. won the 2011T bonds with a 2.977% TIC, and J.P. Morgan Securities Inc. won the 2011R-A bonds with a 2.629% TIC.

The state intends to use the proceeds to refund existing debt and finance general capital projects.

Maryland sells $433 million

It was a big day for the State of Maryland. The state came to market with more than $433 million in new money.

Competitively, the state brought $289.76 million in series 2010 G.O. bonds, according to a term sheet.

The sale included $165 million in second series B bonds, $75 million in second series C bonds and $49.76 million in second series D bonds.

The B bonds are due 2013 to 2021 with coupons from 2.5% to 5%. The C bonds are due 2022 to 2025 with coupons from 4% to 4.3%, all priced at par. The D bonds are due 2025 with a 4.35% coupon, priced at par.

The bonds (Aaa/AAA/AAA) were sold competitively, but calls to the issuer for the winner were not returned Wednesday.

Maryland also priced $143.335 million in second series A G.O. bonds through senior managers Citigroup and M&T Securities Inc., said a pricing sheet.

The bonds (Aaa/AAA/AAA) are due 2013 to 2018 with coupons from 2% to 5%.

Proceeds from both sales will be used for state facilities as well as loans and grants to local governments.

Houston port bonds price

In other news, the Port of Houston Authority in Texas priced $300 million in series 2010 improvement and refunding bonds, said a pricing sheet.

The bonds were sold through Bank of America Merrill Lynch.

The sale included $250 million in series 2010D unlimited tax port improvement and refunding bonds and $50 million in series 2010E unlimited tax refunding bonds.

The 2010D bonds are due 2023 to 2031 with term bonds due 2035 and 2039. The serial bonds have 5% coupons. The 2035 bonds and the 2039 bonds have 5% coupons.

The 2010E bonds are due 2014 to 2030 with term bonds due 2033 and 2038. The serial bonds have coupons from 2% to 4%. The 2033 bonds have a 4.25% coupon. The 2038 bonds have a split maturity with a 4.25% coupon and a 5% coupon.

Proceeds will be used to finance improvements to the city's port and refund existing port debt.

Philly deal prices

Elsewhere, the City of Philadelphia priced $185 million in series 2010C water and wastewater revenue bonds on Wednesday, said a pricing sheet.

The bonds (A1/A/A+) were sold through Citigroup.

The bonds are due 2016 to 2030 with term bonds due 2035 and 2040. The serial bonds have coupons from 3% to 5%. The 2035 bonds have a split maturity with a 4.75% coupon and a 5% coupon. The 2040 bonds have a 5% coupon.

The full pricing details were not immediately available.

Proceeds will be used to finance capital improvements to the city's water and wastewater system as well as terminate a portion of a 2007 swap agreement.

Raleigh airport sale ahead

Looking to upcoming sales, the Raleigh-Durham Airport Authority in North Carolina is set to sell $313.87 million in series 2010 airport revenue refunding bonds, said a preliminary official statement.

The offering includes $238.785 million in series 2010A non-AMT bonds and $75.085 million in series 2010B non-AMT bonds.

The bonds will be sold on a negotiated basis with Barclays Capital as the senior manager.

The 2010A bonds are due 2011 to 2030 with a term bond due 2036. The 2010B bonds are due 2012 to 2025.

Proceeds will be used to refund the authority's series 2008A-B bonds and to terminate a prior interest-rate swap agreement.

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