Washington brings $445.47 million G.O. bonds; some deals pulled as market conditions sour

By Sheri Kasprzak

New York, Oct. 14 - Municipals saw some major losses on Wednesday as the Dow Jones Industrial Average jumped up over 10,000 for the first time in almost a year. The gains in stocks shoved Treasuries down, and municipals may be sinking along with them, said a trader reached in the afternoon.

"It's seriously worse today than it's been in a very long time," the trader said.

"Around 10 years, we're off by about 10 basis points. On the short end and the long end, yields are up by 4 or 5 basis points. Stocks are rallying, so that's part of the problem. Treasuries are off, so we're responding in kind, and any time retail gets their attention snatched away by things like attractive stocks, we [munis] suffer."

The sour condition of the muni market caused some underwriters to pull deals that were scheduled for Wednesday.

The State of Hawaii, said one market insider, was slated to bring its $655.4 million in series 2009 general obligation bonds through Merrill Lynch & Co. Inc.

"I haven't heard when they're going to reschedule it for, but I know it's off the calendar for now. I think a few others are off for now as well," the sellside source said.

Washington brings $445.47 million

Conditions weren't bad enough to keep the State of Washington from pricing $445.47 million in series 2010B and 2010C motor vehicle tax G.O. Build America Bonds (Aa1/AA+/AA), according to a pricing sheet.

The sale included $215.5 million in series 2010B refunding bonds and $229.97 million in Build America Bonds.

The 2010B bonds are due 2011 to 2026 with coupons from 2% to 5%. The 2010C bonds are due 2010 to 2030 with a term bond due 2034. The serials have coupons from 2% to 5%. The 2034 bonds have a 5% coupon and were not reoffered.

J.P. Morgan Securities Inc. and Goldman, Sachs & Co. were the senior managers.

Proceeds will be used to fund state and local highway improvements.

NYC Transitional Finance sale planned

Coming up on Thursday, the New York City Transitional Finance Authority is set to price $800 million in series 2010 future tax secured bonds (Aa2/AAA/AA+) through Goldman Sachs.

The offering includes $140 million in series 2010C-1 tax-exempt subordinated bonds and $660 million in series 2010C-2 taxable subordinated Build America Bonds.

The bonds are due 2011 to 2031.

Proceeds will be used to fund general city capital expenditures.

Also coming up on Thursday, the Dormitory Authority of the State of New York is slated to bring $369.615 million in series 2009 revenue bonds for the Mount Sinai School of Medicine.

The bonds (A3/A-/) will be sold through JPMorgan and Goldman Sachs.

The bonds are due 2017 to 2024 with term bonds due 2029, 2034 and 2039.

Proceeds will be used to finance and construct facilities for the Mount Sinai School of Medicine.

California PWB bonds to price

Looking out on the horizon, the State Public Works Board of California is expected to sell $820 million in series 2009 lease revenue bonds, said a preliminary official statement.

The sale includes $790 million in series 2009G lease revenue bonds for various capital projects and $30 million in series 2009H tax-exempt lease revenue bonds for Department of Corrections and Rehabilitation projects.

Morgan Stanley & Co. Inc. and RBC Capital Markets Inc. are the senior managers.

The maturities have not been set.

Proceeds will be used to fund capital projects and improvements to the state's prisons and rehabilitation facilities.

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