Lancaster County schools of Nebraska sells $100 million G.O.s; Maine Turnpike brings $50 million

By Sheri Kasprzak

New York, Jan. 28 - Muni pricing action was robust on Wednesday, despite a lag in volume moving into February.

Market sources reached earlier this week suggested that an influx of offerings held over from 2008 may have been at the heart of the pricing boom of early January - and now that those bonds have priced, things may be back to a relatively normal pace.

A source reached Wednesday agreed with the suggestion, somewhat.

"I think there's some truth to that," he said, but noted, "There still is some weakness in the market. Issuers are waiting it out for a while. It's still expensive to sell [municipals]."

Activity was led by the Lancaster County School District out of Nebraska, which sold $100 million in series 2009 general obligation bonds (Aa1/AAA/).

Merrill Lynch & Co. came away with the winning bid for the competitive sale with a 4.666719% true interest cost.

The bonds are due 2010 to 2033 with term bonds due 2035 and 2039. Coupons ranged from 3% to 5%, but yields were not immediately available.

Proceeds will be used to construct and renovate schools.

Maine Turnpike sells $50 million

In other pricing news Wednesday, the Maine Turnpike Authority priced $50 million in series 2009 turnpike revenue bonds, said Douglas Davidson, the authority's treasurer.

The bonds (Aa3/A+/AA-) were sold on a negotiated basis with Merrill Lynch and Banc of America Securities LLC at the helm.

The bonds are due 2014 to 2029 with term bonds due 2034 and 2038. The coupons on the serials range from 3% to 5.375%, and the yields range from 2.23% to 5.37%. The 2034 bonds have a 6% coupon to yield 5.46%, and the 2038 bonds have a 6% coupon to yield 5.52%.

The TIC came in at 5.334239%, and the net interest cost came in at 5.488724%.

Proceeds will be used to fund turnpike projects and to make a deposit to a debt service reserve fund.

Elsewhere, East Baton Rouge, La., successfully sold $110 million in series 2009A road and street improvement sales tax revenue bonds (Aa2/AAA/AAA), according to a sellside source. The full terms of the sale were being finalized Wednesday evening.

Citigroup Global Markets Inc. and Merrill Lynch are the lead managers for the sale, the proceeds of which will be used for widening existing roads and constructing new roads.

Baptist Healthcare bonds ahead

Looking to upcoming bond sales, the Kentucky Economic Development Finance Authority plans to sell $217.47 million in series 2009A hospital revenue bonds for the Baptist Healthcare System, said a preliminary official statement.

The bonds (Aa3//AA-) will be sold on a negotiated basis with Goldman, Sachs & Co. as senior manager.

The maturities for the bonds have not been set at this time.

Proceeds will be used to reimburse Baptist Healthcare for the construction and equipment of a new patient and surgery tower at Baptist Hospital East in St. Matthews, Ky., and for the construction of other improvements.

In February's upcoming deals, the School District No. 2 of Richland County in South Carolina is gearing up to price $70 million in series 2009A G.O. bonds Feb. 4, said a notice of sale released Wednesday.

The bonds will be sold on a competitive basis and are due from 2013 to 2023.

Proceeds will be used to construct, improve, renovate and equip school facilities and buildings.

Texas Tech offering

In other upcoming deals, Texas Tech University announced plans to offer $173.985 million in revenue financing system refunding and improvement bonds (Aa3//AA).

RBC Capital Markets and JPMorgan Securities Inc. will act as underwriters for the negotiated bonds, according to a preliminary official statement released Wednesday.

The issue carries maturities from 2009 to 2028.

Proceeds from the sale will be used to acquire or improve school facilities and equipment.

Texas Tech is located in Lubbock, Texas.

Secondary again firmer

Moving to the secondary market, municipals continued to flatten out, coming off weakness from last week. Traders reached Wednesday said the tone was decidedly firmer but that most secondary municipals were unmoved.

"There's not a lot of movement to report," said one trader based out of New York.

"Volume still looks strong. Most of what we're seeing, across the board, is flat, though."

In specific trades, the Corpus Christi Independent School District of Texas saw its recently priced series 2009 school building bonds trading. The 5.375% 2030s were trading at 5.095%.

In other school bond trading action, the recently priced Round Rock Independent School District, also in Texas, saw its series 2009 unlimited tax school building bonds in motion. The 3% 2016s were seen trading at 2.65%.

The Triborough Bridge and Tunnel Authority of New York also saw recently priced bonds trading Wednesday. Its 5% series 2009A-2 general resolution revenue bonds due 2032 were trading at 5.248%.

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