Market in 'sleep mode,' wants early close; Virginia College authority to sell $398.03 million

By Cristal Cody

Tupelo, Miss., Nov. 24 - Most municipal issuers are planning to take a break until after the Thanksgiving holiday with several sales planned for the week of Nov. 30.

On Tuesday, the market was "in sleep mode," Anthony Shields, senior vice president of Grigsby & Associates, Inc., told Prospect News.

Everyone's "looking to an early close tomorrow even though Finra said no more early closes," Shields said.

In the meantime, most of the action seems to be in the short end of the market, he said.

"The bonds du jour are 'kicker bonds,' which are bonds that have short calls (2011-13) and 10-year or so maturities," Shields said. "These give a good yield to maturity when priced to the call and is the structure that clients look to when short rates are too expensive. It is considered a defensive posture."

Virginia College Authority to price

Looking ahead to the week after the holiday break, the Virginia College Building Authority plans to sell $398.025 million in educational facilities revenue bonds for the 21st century college and equipment program.

The bonds are expected to price through a competitive sale on Dec. 2, according to a preliminary official statement released Tuesday.

The sale includes $47.33 million in series 2009F1 bonds due 2011 through 2014 and $350.695 million in series 2009F2 bonds with serial maturities from 2015 through 2030.

First Southwest Co. is the authority's financial adviser.

The proceeds will be used to finance capital projects at higher education facilities in Virginia.

Florida to take bids

Moving down South, the Florida Board of Education intends to sell $155.1 million in capital outlay bonds, according to a summary notice of sale from the state bond finance division.

The series 2009 E-F full faith and credit capital outlay bonds (Aa1//) will be sold through a competitive sale on or after Monday, according to the notice.

The sale includes $14.47 million in series 2009E bonds and $140.63 million in series 2009F Build America capital outlay bonds.

The proceeds will be used to finance education projects.

Another offering out of Florida is expected from the Orange County Health Facilities Authority.

The authority intends to sell $244.055 million in hospital revenue bonds for Orlando Health, Inc., according to a preliminary official statement.

The series 2009 bonds (A2/A/A) include $100.84 million in serial maturities due 2010 through 2019 and $143.215 million in term bonds due Oct. 1, 2026.

Goldman, Sachs & Co. is the senior manager of the negotiated sale.

The proceeds will be used to refund portions of the series 2008D bonds, series 2008F bonds and series 2008G bonds on Dec. 23 and the series 1999D bonds, series 1999E bonds and series 2004 bonds on Jan. 22. Proceeds also will be used to pay costs to terminate interest rate hedge agreements on the refunded bonds.

Michigan plans revenue bonds

Meanwhile, the Michigan State Building Authority intends to price $105.27 million in revenue bonds, according to a preliminary official statement released Tuesday.

The series 2009 II bonds are expected to include serial maturities and term bonds, according to the statement.

Siebert Brandford Shank & Co., LLC is the senior manager of the negotiated sale.

The proceeds will be used to refund outstanding commercial paper notes and pay for construction and improvement of educational and state facilities.

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