Municipals get a boost after Illinois delays $3.7 billion G.O. sale; Florida BOE brings bonds

By Sheri Kasprzak

New York, Feb. 15 - Municipal yields were improved on Tuesday after news spread that the State of Illinois will hold off on bringing its $3.7 billion sale of series 2011 taxable general obligation bonds to market. Illinois Gov. Pat Quinn intends to present his budget plan, and investors, particularly foreign investors, want to hear what he has to say, said market insiders.

"There's a lot of buzz that demand has been good, so the state really wants to show [investors] that it's got a plan," said one sellsider asked about the move.

"BABs really left a hole in the market, and a taxable deal this size is going to draw a lot of interest. To put it off for a week is probably a good move, particularly if they can upsize."

A trader during the day said the move has shoved yields in a positive direction, with yields better by 3 to 5 basis points across the curve.

"There's been a lot of volatility, but this is good news," he said. "This means there's still some value in the market."

The state is poised to bring the bonds next week through Morgan Stanley & Co. Inc., Goldman Sachs & Co. and Loop Capital Markets LLC.

Proceeds will be used to finance the state's underfunded pension program and school capital requirements.

Florida BOE brings bonds

Heading up Tuesday's primary action was the Florida Board of Education's competitive sale of $336.75 million of series 2011A refunding public education capital outlay bonds.

The bonds (Aa1/AAA/AAA) were sold competitively with Bank of America Merrill Lynch winning the bid.

The bonds are due 2012 to 2023 with 3% to 5% coupons, said a pricing sheet.

Proceeds will be used to refund outstanding PECO bonds for debt service savings.

Bellevue school bonds price

Also during the day, the Bellevue School District No. 405 of Bellevue, Wash., priced $197 million of series 2011 unlimited tax G.O. bonds, said a pricing sheet.

The bonds (Aaa/AA+/) were sold competitively with J.P. Morgan Securities LLC winning the bid. The true interest cost came in at 4.29%.

The bonds are due 2012 and from 2015 to 2030 with 3% to 5% coupons.

Proceeds will be used to rebuild three elementary schools, modernize Bellevue High School, modernize the academic portion of Sammamish High School, modernize up to four middle schools and make other capital improvements.

Howard sells $159.55 million

In other competitive offerings, Howard County in Maryland sold $159.55 million of series 2011 G.O. bonds (Aaa/AAA/AAA), said a term sheet.

The offering included $110.58 million of series 2011A consolidated public improvement bonds and $48.97 million of series 2011A metropolitan district bonds.

The 2011A consolidated public improvement bonds are due 2012 to 2031 with coupons from 4% to 5%. The 2011A metropolitan district bonds are due 2012 to 2031 with term bonds due 2033, 2036 and 2041. The coupons range from 4% to 4.75%. None of the bonds were reoffered.

Proceeds will be used to fund capital expenditures.

The county seat is Ellicott City.

NY State Environmental prices

Elsewhere, the New York State Environmental Facilities Corp. brought $132.745 million of series 2011A state revolving fund revenue bonds to market Tuesday, said a pricing sheet.

The bonds (Aaa/AAA/AAA) were sold through Citigroup Global Markets Inc. and Ramirez & Co. Inc.

The bonds are due 2011 to 2022 with coupons from 2% to 5%.

Proceeds will be used to finance or refinance clean water and drinking water projects.

Based in Albany, the corporation provides low-cost funding for environmental projects throughout the state.

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