Muni yields get a boost from Treasury rally; University of Hawaii brings $293.17 million bonds

By Sheri Kasprzak

New York, Sept. 21 - Municipal yields fared better on Tuesday after a Treasury rally sent muni yields up about 2 or 3 basis points, particularly in the middle of the curve, a trader said.

"We didn't see a huge change," he noted, "but there's a firmer tone out there, and the middle of the curve is probably up the most, maybe 2, 3 or so basis points. Elsewhere, we might be flat to a little better, but there's a firmer tone for certain."

Meanwhile, investors focused on Tuesday's heavy primary calendar.

The action was led by the University of Hawaii, which sold $293.17 million in series 2010 university revenue bonds through Bank of America Merrill Lynch, said a pricing sheet.

The offering included $115.145 million in series 2010A-1 Build America Bonds, $23.61 million in series 2010A-2 tax-exempt bonds, $128.295 million in series 2010B-1 Build America Bonds and $26.12 million in series 2010B-2 tax-exempt bonds.

The 2010A-1 bonds are due 2020 to 2025 with term bonds due 2030 and 2040. Coupons range from 4.161% to 5.011%, all priced at par. The 2030 bonds have a 5.834% coupon priced at par, and the 2040 bonds have a 6.034% coupon, also priced at par.

The 2010A-2 bonds are due 2011 to 2019 with coupons from 2.5% to 4%. The full pricing details were not immediately available.

The 2010B-1 bonds are due 2020 to 2025 with term bonds due 2040. The serial coupons range from 4.161% to 5.011%, all priced at par. The 2030 bonds have a 5.834% coupon priced at par, and the 2040 bonds have a 6.034% coupon, also priced at par.

The 2010B-2 bonds are due 2011 to 2019 with coupons from 2.5% to 5%. The full pricing details were not immediately available Tuesday.

The university, which is based in Honolulu, intends to use the proceeds to finance or refinance costs associated with constructing and maintaining the university's Cancer Research Center of Hawaii.

Nashville bonds price

Meanwhile, the Metropolitan Government of Nashville and Davidson County in Tennessee priced $284.07 million in series 2010D general obligation refunding bonds Tuesday, according to a pricing sheet.

The bonds were sold through Jefferies & Co. and Morgan Keegan & Co. Inc.

The bonds are due 2011 to 2024 with 1.5% to 5% coupons.

Proceeds will be used to refund the government's series 2002 multipurpose G.O. refunding bonds, series 2003 multipurpose G.O. bonds, series 2004 multipurpose G.O. bonds, series 2005A G.O. bonds, series 2005B G.O. refunding bonds and series 2005C G.O. school bonds.

NYC Water brings deal

In the Big Apple, the New York City Municipal Water Finance Authority brought $210 million in an upsized offering of series 2011BB water and sewer system second general resolution revenue bonds, said a term sheet. The authority intended to sell $200 million of the bonds.

The bonds (Aa2/AA+/AA+) were sold through Rice Financial Products Co. The co-senior managers were Barclays Capital Inc., Jefferies, Morgan Keegan, M.R. Beal & Co. Inc. and Ramirez & Co.

The bonds are due 2011 and 2014 to 2017 with term bonds due 2019, 2025, 2030 and 2031. Coupons range from 3% to 5%.

Proceeds will be used to refund existing debt.

Dasny deal sold

Also out of New York, the Dormitory Authority of the State of New York priced $197 million in series 2010A consolidated fifth general resolution revenue bonds for the City University of New York, said a pricing sheet.

The bonds were sold through Citigroup Global Markets Inc. and J.P. Morgan Securities Inc.

The bonds are due 2011 to 2026. Coupons range from 2% to 5%.

Proceeds will be used to refund debt issued by the university.

The Albany-based authority provides funding for educational, health-care, nonprofit and corporate projects.

St. Joseph bonds price

Elsewhere, the Pennsylvania Higher Educational Facilities Authority priced Tuesday $119.5 million in series 2010A revenue bonds for Saint Joseph's University, said a pricing sheet.

"Pricing went about as we expected," said a sellsider connected to the offering.

"We felt that now was a good time to come to market given the current market conditions. The issuer did have projects to fund, so it helped that the market conditions were favorable at this time."

The bonds (/A-/A-) were sold through Barclays.

The bonds are due 2011 to 2026 with term bonds due 2030, 2034 and 2040. The serial coupons range from 2% to 5%. The 2030 bonds have a split maturity with a 4.25% coupon priced at 99.462 and a 5% coupon priced at 105.758. The 2034 bonds have a split maturity with a 4.25% coupon priced at 95.634, a 4.5% coupon priced at 99.269 and a 5% coupon priced at 103.602. The 2040 bonds also have a split maturity with a 4.6% coupon priced at 99.592 and a 5% coupon priced at 102.99.

Proceeds from the sale will be used to refinance $80 million in existing variable-rate debt, finance the construction of a new residence hall and facilitate other capital improvements at the university.

Based in Lemoyne, the authority provides funding for higher educational facilities within the commonwealth. The university is based in Philadelphia.

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