New York Liberty puts off $900 million deal citing market conditions; yields remain flat

By Sheri Kasprzak

New York, April 11 - With yields rising and investor interest dwindling, the New York Liberty Development Corp. once again pulled its planned $900 million offering of revenue bonds off the primary calendar, a sellsider familiar with the issue told Prospect News Monday.

"It really comes down to the pricing environment," the sellsider said.

"The market isn't really favorable right now, but who knows in the next few weeks? It hasn't been canceled, but we can't really put a new date on it right now."

This is the corporation's second attempt to sell the bonds. Back in December, the corporation intended to price the bonds but pulled them over market conditions.

The corporation is selling the bonds on behalf of Silverstein Properties, which intends to use the proceeds to finance construction on Tower 4 of the World Trade Center.

Goldman Sachs & Co. and J.P. Morgan Securities LLC are the lead managers for the sale.

The bonds are due April 15, 2031, April 15, 2041 and April 15, 2047.

Yields hold steady

On Monday, yields remained mostly unchanged as primary supply for the week ahead remains light.

Just $3.8 billion of supply is anticipated for the week ahead, said Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC. This estimate was made before the New York Liberty Development offering was pulled.

The bulk of the week's primary volume will come from the North Texas Tollway Authority's planned $1.029 billion offering of revenue bonds and taxable bond anticipation notes slated to come to market Thursday.

That deal includes $606.467 million of series 2011 special projects revenue bonds and $422.315 million of taxable BANs.

Citigroup Global Markets Inc. is the senior manager.

Proceeds will be used to make an upfront payment to the Texas Department of Transportation for the authority's right to own and operate an 11.5-mile stretch of State Highway 161 in western Dallas County extending from State Highway 183 to Interstate 20.

The authority is based in Dallas.

S&P creates panic

Meanwhile, panic arose over a technical error made at Standard & Poor's on Friday, said Kozlik. The ratings agency apparently made a clerical error and withdrew its ratings on the Commonwealth of Massachusetts.

"We received several phone calls about the matter as market participants received notices indicating the commonwealth's S&P rating was withdrawn," Kozlik said Monday.

Kozlik noted that the withdrawal was simply an input error that was broadcast over various media outlets. The rating was later reinstated.

The fear, Kozlik said, likely stemmed from S&P's multi-notch downgrade and withdrawal of DeKalb County, Ga.

Dallas bonds, notes price

Heading up Monday's light primary action, Dallas County of Texas sold $73.945 million of series 2011 bonds and notes, said a pricing sheet.

The sale included $30.495 million of series 2011A unlimited tax refunding bonds, $1.905 million of series 2011B limited tax refunding bonds and $41.545 million of series 2011 limited tax notes.

The 2011A bonds are due 2011 to 2021 with coupons from 1.5% to 5%. The 2011B bonds are due 2011 to 2012 with 1.5% to 3% coupons. The limited tax notes are due 2012 to 2018 with coupons from 2% to 5%.

The bonds (Aaa/AAA/) were sold on a negotiated basis with Siebert Brandford Shank & Co. LLC as the senior manager.

Proceeds will be used to improve, remodel and equip medical facilities, holding cell smoke devices, a control center, stainless steel showers and an intercom system at the Lew Sterrett Justice Center; to improve, remodel and equip the George L. Allen Sr. Courts Building; to improve, remodel and equip the Frank Crowley Courts Building; and to improve, remodel and equip the county's records building, as well as to update elevators and purchase an enhanced and expanded video conference system for county offices.

Klein ISD prices bonds

Also during Monday's action, the Klein Independent School District of Texas priced $83.9 million of series 2011 unlimited tax schoolhouse bonds late in the day. The pricing terms of the bonds were not immediately available.

The bonds (Aa1/Aaa/AAA/) were sold competitively and are due 2012 to 2041. RBC Capital Markets LLC was the financial adviser.

Proceeds will be used to construct, acquire and renovate school facilities.

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