Municipals trade lightly on wide bid-ask spreads; New York City to price $520 million G.O. bonds

By Cristal Cody and Aaron Hochman-Zimmerman

New York, Feb. 20 - The municipal market looked ahead from a slow Friday to a busier week on Monday, but not before yields grew wider during a difficult session.

Trading "was really quiet" and was becoming more of a challenge with wide bid-ask spreads, said a trader focused on Maryland and Virginia.

"The MMD is not turning out to be a really good tool," she said.

Maryland and Virginia have been more "recession proof" than some of the other areas of the country, she said, particularly California and Florida.

"So you buy what you know; buy what's in your own backyard," she said.

Investors have been running to quality, she said, but "what is quality?"

In the past, investors had become trained not to look at underlying ratings.

"People, for years, were lulled into a false sense of security" by the perceived security of the municipal bond insurers, she said.

New York City plans $520 million G.O.s

Meanwhile in the primary, several issuers plan to move forward with sales before the end of February, including a $520 million general obligation bond offering from New York City.

New York City expects to sell the series 2009H G.O. bonds (//AA-) on Wednesday, a source with the Office of the New York City Comptroller told Prospect News.

The bonds also are offered in a three-day retail order period that started Friday.

"We are out in the market with retail today," the source said.

The sale includes $400 million in subseries H1 tax-exempt bonds and $120 million in subseries H2 taxable bonds.

Citigroup Global Markets Inc. is the senior manager of the negotiated sale.

The proceeds will be used to finance capital improvements in the city.

Also coming up on Wednesday, Williamson County in Texas expects to sell $100.085 million in revenue and limited tax bonds, Dan Wegmiller, managing director of financial adviser firm Specialized Public Finance Inc., told Prospect News.

"We're going to knock it all out in one day," he said.

The sale includes $92.085 million in series 2009 pass-through toll revenue and limited tax bonds and $8 million in series 2009 limited tax bonds, according to a preliminary official statement.

The series 2009 pass-through toll bonds have serial maturities from 2013 through 2034, and the series 2009 limited tax bonds have serial maturities from 2010 through 2029.

Morgan Keegan & Co., Inc. is the senior manager of the negotiated sale.

The proceeds will be used to construct, renovate, equip and acquire land, buildings and facilities for park and recreational purposes and to improve state highway roads located in the county.

Kansas City to price $80.66 million

The Unified Government of Wyandotte County/Kansas City in Kansas plans to issue $80.66 million in three parts, according to Lew Levin, chief financial officer.

On March 5, the government will sell $7.08 million series 2009-III municipal temporary notes, $73.28 million series 2009-IV municipal temporary notes and $300,000 series 2009-V municipal temporary notes.

"They might have a TIC around 5%," Levin.

The notes will be sold competitively with a minimum bid of 99.5 for each of the tranches.

Springsted Inc. will act as financial adviser to the deal.

All of the notes will mature on March 1, 2010.

Proceeds will be used for county projects and to retire existing debt.

The Wyandotte County seat is located in Kansas City, Kan.

Green Mountain G.O.s

Moving into March, Vermont intends to price $50.5 million in G.O. bonds on March 3, David Minot, director of finance and investments for the state, told Prospect News.

The series 2009A bonds (Aaa/AA+/AA+) have serial maturities from 2010 though 2029, according to a preliminary official statement.

Citigroup Global Markets is the senior manager of the negotiated sale.

The proceeds will be used for projects through the state, including for natural resources, agriculture, criminal justice and fire service training councils.

Indianapolis bond bank notes

In other announcements, the Indianapolis Local Public Improvement Bond Bank plans to price $131.625 million in series 2009 A-D notes.

The sale includes $66.125 million series 2009A, $52.65 million series 2009B, $6.05 million series 2009C and $6.8 million series 2009D notes.

The notes (MIG1) are due Jan. 15, 2010.

City Securities Corp. is the senior manager of the negotiated sale.

The proceeds will be used to provide funds to purchase warrants from Marion County and the Indianapolis-Marion County Public Library of Indiana.

Amherst College to sell $100 million

The Trustees of Amherst College in Massachusetts plan to sell $100 million in series 2009A taxable bonds (Aaa).

Goldman, Sachs & Co. is the senior manager.

The proceeds will be used for working capital and corporate purposes.

Northside ISD, Texas, building bonds

The Northside Independent School District of Bexar County in Texas expects to sell $75 million in unlimited tax school building bonds.

The series 2009 bonds have serial maturities from 2012 through 2039.

Frost Bank is the senior manager of the negotiated sale.

The proceeds will be used to acquire, construct, renovate and equip school facilities and school property.

Parking Authority of River City bonds

Also ahead, the Louisville/Jefferson County Metro Government Parking Authority of River City Inc. in Kentucky intends to sell $54.94 million in revenue bonds through a competitive sale on Thursday.

The $38.85 million series 2009A first mortgage revenue bonds have serial maturities from 2010 through 2039.

The $16.09 million series 2009B first mortgage revenue refunding bonds have serial maturities from Dec. 1, 2009 through Dec. 1, 2020.

Public Financial Management is the authority's financial adviser.

The proceeds will be used to finance the Louisville Arena Parking Garage and to refinance the outstanding series 1997 first mortgage revenue refunding bonds.

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