Intermediate bonds firm slightly; Fairfax County Economic Development brings $220 million sale

By Sheri Kasprzak

New York, May 10 - The middle of the yield curve saw some improvement on Tuesday even as the rest of the market remained unmoved, traders reported. Meanwhile, the market awaits a fairly large supply of new deals in the coming days.

"The middle is firmer by 1 to 2 [basis points]," said one trader.

"There's very little movement anywhere else. Maybe 1 [basis point] outside of 20 years, but it's been really quiet for trading, and there hasn't been a fantastic amount of supply. We're really waiting for the rest of the week to see how things will go, but today was flat and slow for the most part."

There were a few offerings on the primary calendar for the day. Fairfax County Economic Development Authority priced $220 million of series 2011 Silver Line Phase I project transportation district improvement revenue bonds.

The bonds (Aa2) were sold through J.P. Morgan Securities LLC.

The bonds are due 2012 to 2031 with a term bond due in 2036. The serial coupons range from 2% to 5%. The 2036 bonds have a 5% coupon, said a pricing sheet.

Proceeds will be used to finance a portion of the county's share of the Dulles Metrorail Silver Line extension.

The authority is based in Tysons Corner, Va.

Chicago Medical brings bonds

Elsewhere during the session, the Illinois Finance Authority sold $90 million of series 2011C revenue bonds for the University of Chicago Medical Center on Tuesday, said a pricing sheet.

The bonds (Aa3/AA-/AA-) were sold through JPMorgan.

The bonds are due Aug. 15, 2037 and Aug. 15, 2041. Both series have a 5.5% coupon.

Proceeds will be used to finance or reimburse the medical center for the construction of a new hospital pavilion.

Nebraska powers sale

Also in the primary, the Nebraska Public Power District brought to market $61.44 million of series 2011 general revenue bonds, said a pricing sheet.

The bonds (A1/A/A+) were sold through Wells Fargo Securities LLC.

The bonds are due 2012 to 2017 with 1.5% to 5% coupons.

Proceeds will be used to refund the district's taxable notes issued to purchase nuclear fuel as well as to make a deposit to its debt service reserve fund.

Kansas Development prices

Over in the competitive market, the Kansas Development Finance Authority priced $51.62 million of series 2011A Kansas revolving fund revenue bonds for the Kansas Department of Health and Environment, said Rebecca Floyd, the authority's executive vice president.

Barclays Capital Inc. won the bid with a 3.9% true interest cost. There were 12 bids for the offering, Floyd said.

The bonds (/AAA/AAA) are due 2013 to 2017 and 2023 to 2031 with coupons from 2% to 4.2%.

Proceeds will be used to fund existing loan commitments under the Kansas Department of Health and Environment's drinking water loan fund.

Floyd said in an interview Tuesday that the authority may sell its bonds on either a competitive or negotiated basis.

"KDFA typically prefers to sell established, straightforward, highly rated credits pursuant to a competitive sale process, and current market conditions evidencing a relatively low supply of municipal tax-exempt bonds also suggested a competitive bid process would garner strong interest," she said.

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