Port of Los Angeles brings $200 million; woes in California may impact Ventura County sale

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, June 25 - Municipals finished out a fairly quiet session a bit firmer, market insiders said. Meanwhile, the week ahead will prove much quieter for the new issue side of the market.

"We're looking better by maybe 2 to 3 basis points," noted one trader reached in the afternoon. "Still not much moving [in secondary]."

Among Thursday's primary action was a $200 million sale of revenue bonds from the Port of Los Angeles in California.

The bonds (Aa2/AA/AA) were sold through lead manager J.P. Morgan Securities Inc.

The sale included $100 million in series 2009A bonds, which are due 2011 to 2029, and $100 million in series 2009B bonds, which are due 2034 and 2039, said port spokeswoman Rachel Campbell.

The 2009A bonds have coupons from 3% to 5.25% and yields from 1.65% to 5.15%. The 2009B 2034 bonds have a 5.25% coupon to yield 5.39%, and the 2039 bonds have a 5.25% coupon to yield 5.43%.

Proceeds will be used to fund port improvements.

California trouble impacts COPs

A few offerings in the coming week come out of the Golden State, and California's budget problems may negatively impact at least one of the sales.

Ventura County, Calif., will offer $90 million in 20-year certificates of participation (A1/AA/) during the week, according to Paul Derse, chief financial officer.

"We're running out of capacity on our commercial paper program," Derse said.

Even if the sale is successful, Derse said, the county will likely return to commercial paper for financing.

The downgrade of the California credit is "affecting the general muni market," he said, and probably will have a negative impact on the sale.

"The weight of the state on the local governments" is great enough for the county to alter its plans, Derse said.

Merrill Lynch & Co. will act as lead underwriter for the negotiated deal.

Proceeds from the bonds will be used to make improvements to a medical office building as well as refinance existing COPs.

Orange County to sell

Also out of the California next week, Orange County plans to sell $235.765 million in series 2009 airport revenue bonds Tuesday, said a sales calendar.

The bonds (Aa3/AA-/AA-) will be sold through lead manager Citigroup Global Markets Inc.

Proceeds will be used to fund airport facilities and improvements as well as fund a debt service reserve fund.

The county seat is Santa Ana, Calif.

Miami-Dade plans two

Also ahead this coming week are two sales out of Miami-Dade County in Florida. The county plans to price $217.18 million in series 2009 professional sports tax and refunding bonds and $100 million in series 2009 subordinate special obligation bonds.

The sports tax bonds are planned for the week, but no official pricing date has been set. The bonds (Aa2/AAA/AA) will be sold through lead manager Merrill Lynch & Co. Inc.

The special obligation bonds will be sold on Tuesday, a sales calendar said.

The bonds (A3/A+/A) will be sold through lead manager JPMorgan.

The proceeds of both sales will be used to construct a baseball stadium for the Florida Marlins.

St. Louis airport bonds

Also on Tuesday, the City of St. Louis is planning to sell its previously announced $130 million in series 2009 revenue and revenue refunding bonds for the Lambert-St. Louis International Airport, according to a sales calendar.

The bonds (Baa1/A/BBB) will be sold through senior manager Goldman, Sachs & Co.

The offering will include three tranches: $104.54 million in 2009A-1 revenue bonds, $21.87 million in 2009A-2 revenue bonds and $3.59 million in 2009B refunding bonds.

The 2009A-1 bonds are due 2016 to 2036 with term bonds, and the 2009A-2 bonds are due 2010 to 2015 with term bonds. The maturities for the 2009B bonds were not immediately available.

Proceeds will be used to fund airport improvements and refund existing debt.

Secondary firms

As the week wound down Thursday, traders said they saw little trading, even as the tone remained firm with yields dropping by a couple of basis points.

Among the light trading activity were the Port Authority of New York and New Jersey's recently priced 158th series consolidated bonds. The 5.859% 2024 bonds were seen at 5.7%.

Also on Thursday, the Memphis-Shelby County Sports Authority of Tennessee's series 2009A revenue bonds were moving. The 5.25% 2027 bonds were seen at 5.281%.

Elsewhere, the San Diego Public Facilities Financing Authority's series 2009B refunding bonds were also in motion. The 4% 2013 bonds were seen at 2.504%.

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