Muni market improves during the week; Wake County, N.C., prices $300 million BANs with 1.7% yield

By Cristal Cody and Sheri Kasprzak

New York, Oct. 22 - The muni market is improving rapidly, just this week, a closed-end fund manager said Wednesday during Legg Mason Inc.'s conference call to discuss the latest market events.

Joe Deane, who manages closed-end funds for Western Asset Management Co., Legg Mason's affiliate, said the numbers have come back to invest in the longer end of the curve.

"In the last 48 hours, munis have experienced a tremendous rally from the bottom of the market," he said. "It went literally from a marketplace that had no bids to a marketplace that had no offerings."

Legg Mason has been taking cash built up in September and this month and buying bonds at 6.5% and 7.5%.

"We felt it's a terrific opportunity to put money to work at the longer end of the curve," he said. "There were bonds we bought last Thursday and Friday that are up 100 and 115 basis points today.

"Most of the selling taking place in the last couple of weeks were single-strategy hedge funds or other mutual funds and that has created opportunities. We're definitely in much better shape than we were."

Wake County, N.C., brings $300 million BANs

Wake County in North Carolina took advantage of the improved market to price $300 million in short-term bond anticipation notes with a 1.7% yield Wednesday in the county's first short-term note sale, a source told Prospect News.

The county cancelled the competitive sale on Wednesday of the $354.5 million in series 2008A general obligation public improvement bonds and instead sold the series 2008 BANs through a negotiated sale managed by Banc of America Securities.

"We issued these notes with the intent to issue the long-term bonds within the next year," the source said.

The market is better for short-term securities, the source said.

The notes (MIG 1/SP-1+/F1+) priced with a 3.5% coupon and mature Oct. 15, 2009.

Proceeds will be used to construct libraries, county schools and community college facilities.

Arizona State bonds price

In other pricing news Wednesday, Arizona State University successfully priced $103.25 million in series 2008C revenue bonds, a sellside source connected to the bonds said.

However, the final pricing terms will likely not be available until Thursday.

The bonds (Aa3/AA/) were sold through Merrill Lynch and are due from 2010 to 2038.

Proceeds will be used to reimburse the university for costs of the Polytechnic Academic Complex and the renovation of a hazardous materials facility.

RIT of New York to sell $85 million

Looking ahead to new offerings, the Rochester Institute of Technology is slated to price $85 million in series 2008A revenue bonds through the Dormitory Authority of the State of New York Monday, according to a preliminary official statement.

The bonds (A1) will be sold on a negotiated basis with RBC Capital Markets and Morgan Stanley as the senior managers.

The bonds are due in a serial structure with term bonds, but the exact maturities have not been set.

Proceeds will be used for the construction of mixed-use residential housing; the renewal, reconstruction and renovation of the heating and cooling system on campus; and the rehabilitation of academic, residential, athletic and administrative facilities.

Portland airport in Oregon releases details

The Port of Portland in Oregon released additional details on next month's sale of $130.365 million in revenue bonds for the Portland International Airport.

The series 19 bonds (/AA-/) have serial maturities from 2010 through 2023 and terms due 2028 and 2038, according to a preliminary official statement.

The bonds are expected to price on Nov. 5, according to a sale calendar.

Goldman, Sachs & Co. is the senior manager of the negotiated sale.

The proceeds will be used for projects that include constructing a new port headquarters building, extending the airport's north runway and deicing system improvements.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.