Los Angeles sells $277.7 million; Memphis prices BANs; retail takes 25% of California bonds

By Cristal Cody

Tupelo, Miss., April 10 - Municipal bonds continued to find support on Wednesday in line with stronger Treasuries.

The City of Los Angeles sold $277.7 million of general obligation refunding bonds, and the City of Memphis priced $71,975,000 of bond anticipation notes, informed sources said.

Heavy primary activity is scheduled for Wednesday, including the State of Connecticut's $555 million offering of G.O. bonds. Other deals forecast for the day include revenue refunding bonds and revenue bonds from the Baltimore/Washington International Thurgood Marshall Airport and a sale of G.O. bonds from the State of South Carolina.

The State of California sold more than a quarter of its $1.3 billion of various purpose G.O. bonds (A1/A-/A-) in the first day of a retail order period on Tuesday.

Retail investors bought $329 million of the state's G.O. bonds, according to the state treasurer's office.

"Today's retail orders represented 25.3% of the $1.3 billion offering," the state treasurer's office said in a news release.

Preliminary yields quoted to retail investors on Tuesday included 0.68% for the state's two-year maturity, 1.54% for a five-year maturity, 2.82% for a 10-year maturity and 4.45% for a 30-year maturity.

The deal includes $890 million of new money for infrastructure projects and $410 million of refunding bonds.

Citigroup Global Markets Inc., Bank of America Merrill Lynch and Morgan Stanley & Co. LLC are the lead managers. Fidelity Capital Markets is co-senior manager.

Proceeds will be used to fund construction projects and to current and advance refund some of the state's outstanding G.O. bonds for debt service savings.

L.A. sells $277.7 million

Los Angeles sold $277.7 million of series 2012A G.O. refunding bonds on Tuesday at a true interest cost of 2.23%, an informed market source said.

"In terms of bids, it seems it was pretty strong," the source said. "The results were as good as expected."

The bonds (Aa3/AA-/AA-) were sold on a competitive basis. Barclays Capital Inc. was the winning bidder.

The bonds priced with 3% to 5% coupons to yield 0.69% to 3% over the maturities from 2013 through 2025.

Public Resources Advisory Group and KNN Public Finance were financial advisers.

Proceeds will be used to refund the city's series 2004A, 2005A and 2006A G.O. bonds.

Memphis prices BANS

Also in the market on Tuesday, Memphis priced $71,975,000 of series 2012 bond anticipation notes, an informed source said.

The deal was restructured from $75.4 million.

The notes due April 1, 2014 priced with a 3% coupon to yield 0.35%.

The BANs (MIG1/SP-1+/) priced competitively with a TIC of 0.375663%. J.P. Morgan Securities LLC was the winner bidder.

The market tone "was exceptional for us," an informed source said. "We got 10 bids."

First Southwest Co. and ComCap Advisors were the financial advisers.

Proceeds will be used to refund and pay at maturity the city's series 2010 notes, which are due May 1, 2012.

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