Municipal market digests new paper; Vandy sells $330 million; Virginia Housing plans $348 million

By Cristal Cody and Aaron Hochman-Zimmerman

New York, March 12 - Municipals kept a slow pace at the trading desks Thursday while the underwriters scrambled to handle more new deals.

In the secondary, "the market was just quiet," a trader said.

Investors are "just trying to digest" all of the new paper that has been placed into the market this week, he said.

The focus has been far from the secondary market in recent sessions, but the digestion process is going fairly well, the trader said, even as "there is more supply coming."

Still, the trader was more optimistic for the coming days.

"Next week should be busier," he said, as the equity market has given many a brighter outlook on the near-term future.

On the primary side, the week's streak of major issues looked to continue as the Regents of the University of California was close to concluding its $800 million offer of series O-P general revenue bonds, according to a university spokesman.

Commodores steam to $330 million sale

Also on the collegiate circuit, Vanderbilt University sold $330 million in revenue bonds.

The Nashville-based university said Thursday the series 2009A and 2009B fixed-rate bonds (Aa2/AA/AA) priced with a 5.20% true interest cost.

The bonds were sold with 4.00% to 5.50% coupons to yield 3.21% to 5.28% for the serial maturities from 2015 through 2039.

The bonds were sold Wednesday through the Health and Educational Facilities Board of the Metropolitan Government of Nashville and Davidson County.

Merrill Lynch & Co. was the senior manager of the negotiated sale.

The proceeds will be used to refund the series 2005B1 flexible-rate bonds, the series 2005B2 term-rate bonds and outstanding commercial paper on April 1 and to finance capital improvements to university facilities.

Also in the Volunteer State, Shelby County priced $214.695 million in series 2009A general obligation public improvement and school refunding bonds (Aa2/AA+/AA), according to Mike Swift, county deputy director of administration and finance.

Morgan Keegan & Co., Inc. acted as lead underwriter for the negotiated issue.

The bonds carry maturities from 2010 to 2022.

Proceeds will be used to refund portions of the outstanding series 2007A, 2008A-B G.O. bonds on April 6. Funds will also be used to pay termination frees for interest rate swaps associated with the refunded bonds.

The Shelby County seat is located in Memphis.

Virginia Housing Development to sell $348 million

The Virginia Housing Development Authority intends to sell $348 million in rental housing bonds, according to a preliminary official statement.

The sale includes $176.91 million in series 2009C and $171.09 million in series 2009D taxable bonds.

The bonds (Aa1/AA+/) will price through a negotiated sale led by senior manager Raymond James & Associates, Inc.

The proceeds will be used to refund outstanding debt.

Metropolitan Washington Airports to offer $235 million March 25

Also coming up, the Metropolitan Washington Airports Authority in Washington, D.C., intends to price its previously announced $235 million in revenue bonds on March 25, the issuer said Thursday.

The series 2009B bonds also will be offered through a two-day retail order period beginning March 23, said debt program manager Valerie O'Hara.

The bonds have serial maturities from 2010 through 2029, according to a preliminary official statement.

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

The proceeds will be used to fund capital airport projects, refinance a portion of the authority's outstanding series one revenue commercial paper notes and pay to terminate interest rate swap agreements with Wachovia Bank and Bank of Montreal.

Connecticut plans $310 million G.O.s

Heading north on I-95, the State of Connecticut plans to price $310 million in G.O. bonds.

The $80 million in series 2009A taxable bonds have serial maturities from 2010 through 2019.

The $155 million in series 2009B new money bonds have serial maturities from 2010 through 2023.

The $75 million in series 2009C refunding bonds have serial maturities from 2010 through 2017.

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

The proceeds will be used to finance projects and refund the callable maturities of the outstanding series 1997D, series 1998C and series 1998D G.O. bonds.

Rhode Island brings transportation, health-care bonds

Next door in New England, two sales are on the way from Rhode Island agencies.

The Rhode Island Economic Development Corp. plans to price $179.125 million in grant anticipation and revenue bonds for the Rhode Island Department of Transportation, according to preliminary official statements.

The $167.82 million series 2009A grant anticipation bonds have serial maturities from 2010 through 2021.

The $11.305 million series 2009A motor fuel tax revenue bonds have serial maturities from 2010 through 2027.

Citigroup Global Markets Inc. will be the senior manager of the negotiated sale of the grant anticipation bonds and will manage the negotiated sale of the revenue bonds.

The proceeds will be used to fund transportation projects.

Also ahead, the Rhode Island Health and Educational Building Corp. expects to price $123.765 million in hospital financing revenue bonds for the Lifespan Obligated Group on Tuesday, a source told Prospect News.

The previously announced series 2009A term bonds are due in 2030 and 2039, according to a preliminary official statement.

Morgan Stanley is the senior manager of the negotiated sale.

The proceeds will be used to acquire, construct, renovate, expand and equip hospital and health-care facilities.

Art Institute of Chicago revenue bonds

Meanwhile in the Midwest, the Illinois Finance Authority plans to sell $140 million in revenue bonds (A1/A+/) for the Art Institute of Chicago.

The sale includes $60 million in series 2009A fixed-rate bonds and $40 million in series 2009B1 and $40 million in series 2009B2 adjustable-rate weekly interest revenue bonds.

J.P. Morgan Securities Inc. will be the senior manager of the negotiated sale of the series 2009A bonds and will manage the negotiated sale of the series 2009B1 and series 2009B2 bonds.

The proceeds will be used to finance, refinance and reimburse for the costs to acquire, construct, renovate, improve and equip cultural facilities.

Missouri Joint Municipal Electric Utility to sell $101.42 million

In other new announcements, the Missouri Joint Municipal Electric Utility Commission plans to sell $101.415 million in power project revenue bonds.

The $98.335 million series 2009A bonds have serial maturities from 2013 through 2019 and terms due in 2029 and 2039.

The $3.08 million series 2009B bonds are due in 2012.

J.P. Morgan Securities is the senior manager of the negotiated sale.

The proceeds will be used to finance a portion of the costs to acquire an interest in a coal-fired generating unit under construction near Weston, Mo.

Keller Independent School District in Texas to price

Now southbound on I-35, the Keller Independent School District in Texas expects to price $161.949 million in school building and refunding bonds (Aa2/AA/) during the week of March 16, a market source said Thursday.

The sale includes $142.299 million in series 2009 school building bonds, which will price as current interest and premium capital appreciation bonds, and $19.65 million in series 2009 refunding bonds.

The current interest bonds have serial maturities from 2011 through 2035.

The capital appreciation bonds have serial maturities from 2015 through 2017.

The refunding bonds have serial maturities from Aug. 15, 2009 through Feb. 15, 2027.

Morgan Keegan is the senior manager of the negotiated sale.

The proceeds will be used to construct, equip and renovate school buildings and to refund a portion of the outstanding series 1997A and series 1998 school building and refunding bonds.

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