Los Angeles MTA brings $245.83 million in refunding bonds; market settles the day unmoved

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, June 4 - The municipals market closed out Thursday relatively unmoved, said market insiders.

"We're little moved, pretty much across the yield curve," said a trader reached late Wednesday.

"Things have settled down a bit as the week has gone on, but we're still not seeing a lot moving in secondary."

Another trader agreed.

"The market's just kind of quiet and a little weak, but not dramatically," the trader said.

Primary action was led by the Los Angeles County Metropolitan Transportation Authority, which priced $245.825 million in series 2009 proposition C sales tax revenue refunding bonds at a true interest cost of 3.496913% (A1/AA+/) on Wednesday, according to assistant treasurer Mike Smith.

Also on Wednesday, Los Angeles County postponed its $900 million deal while the county reacted to state budget proposals in Sacramento.

Some money has already been cut, but "we're not further impacted by the state," Smith said.

"They are sales tax secured and it is completely independent of the state budget," he said about the bonds.

Goldman, Sachs & Co. acted as underwriter for the negotiated bonds, which carry maturities from 2010 to 2020.

Proceeds from the sale will be used to retire commercial paper, refund series 1993A bonds and terminate a series 1993A bond swap agreement.

Elsewhere Thursday, the State of New Jersey sold $238.02 million in series O general obligation bonds, but the terms, an insider said, were still being determined. The insider said the yields were tentatively in the range of 1.75% to 3.82%, but that information had not been finalized by press time.

The bonds were sold competitively with Public Financial Management Inc. as the financial adviser. The bonds are due 2012 to 2022, and proceeds will refund existing auction-rate bonds.

Guam sells $271.07 million

In other pricing news, the Government of Guam priced $271.07 million in series 2009A G.O. bonds Wednesday, said a sellside source connected to the deal.

The bonds (/B+/) were sold through senior managers Citigroup Global Markets Inc. and Piper Jaffray & Co. Citi sold 65% of the bonds, while Piper took care of the remainder.

The bonds are due 2014, 2019, 2029 and 2039. The 2014 bonds have a 5.75% coupon to yield 6.2%, the 2019 bonds have a 6% coupon to yield 6.4%, and the 2029 bonds have a 6.75% coupon to yield 7%. The 2039 bonds have a 7% coupon to yield 7.18%.

Proceeds will be used to fund a government-incurred settlement, tax refunds and capital improvements to Guam Memorial Hospital.

Hawaii to bring $616.54 million

In upcoming sales, the State of Hawaii is scheduled Tuesday to price $616.535 million in series 2009 G.O. and G.O. refunding bonds (Aa2), said a preliminary official statement.

The sale includes $400 million in series 2009DQ G.O. bonds and $216.535 million in series 2009DR G.O. refunding bonds.

Citigroup and Merrill Lynch & Co. Inc. are the lead managers.

The 2009DQ bonds are due 2013 to 2029, and the 2009DR bonds are due 2014 to 2019.

Proceeds will be used to reimburse the state for costs related to capital improvements as well as to refund several of the state's outstanding bonds.

Alabama school sale

Also coming up next week, the Alabama Public School and College Authority plans to price $324.455 million in series 2009 capital improvement and capital improvement refunding bonds June 11, said a preliminary official statement.

The sale includes $284.82 million in series 2009A capital improvement refunding bonds and $39.635 million in series 2009B capital improvement bonds.

The bonds will be sold competitively with Public FA Inc. as the financial adviser.

The 2009A bonds are due 2011 to 2019. The 2009B bonds are due 2010 to 2029.

Proceeds will be used to refund existing debt and to make loans to students.

Provena Health deal planned

In other upcoming offerings set for later this month, the Illinois Finance Authority is expected to price $175 million in series 2009A revenue bonds for Provena Health, according to a preliminary official statement.

The bonds (Baa1/BBB+/) will be sold on a negotiated basis with J.P. Morgan Securities Inc. as the lead manager.

Proceeds from the sale will be used to reimburse Provena for costs related to constructing, acquiring, renovating, remodeling and equipping Provena facilities.

Also ahead, the Rhode Island Economic Development Authority is set to sell $150 million in series 2009A historic structures tax credit financing program revenue bonds, said a preliminary official statement.

Pricing is expected for June.

The bonds will be sold through lead managers JPMorgan and Citi.

The maturities have not yet been set.

Proceeds will be used to construct improvements to historic sites in the state.

Secondary trading light

In Thursday's light trading action, the New Jersey State Housing Finance Agency saw its 5.25% 2014 bonds moving at 5.47%.

Elsewhere, the Build America Bonds San Antonio recently priced for CPS Energy were also in action. The 5.985% 2039 bonds were seen at 5.842%.

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