Long bonds seen improved, rest of yield curve flat; Massachusetts water pollution bonds price

By Sheri Kasprzak

New York, June 29 - Municipal yields were seen largely unchanged with a firmer tone and the longer portion of the yield curve seen improved by 1 to 2 basis points, said one trader.

"Up to about 30 years, we're pretty flat," said the trader. "Out past 30 years, if yields are improved at all, it's maybe 1 or 2 bps."

Meanwhile, primary action dominated the market, led by a $486.495 million sale of series 2010 state revolving fund bonds from the Massachusetts Water Pollution Abatement Trust.

The offering included $191.9 million in series 15A bonds, $252.595 million in series 15B Build America Bonds and $42 million in series 2010A bonds, said a pricing sheet.

The 15A bonds are due 2011 to 2021 with coupons from 2% to 5%. The 15B bonds are due Aug. 1, 2040 and have a 5.192% coupon, priced at par.

The 2010A bonds are due 2014 to 2026 with coupons from 3% to 5%.

Goldman, Sachs & Co. was the senior manager for the bonds (Aaa/AAA/AA).

Proceeds will be used to fund loans for water and wastewater capital projects for 85 governmental units as well as refund the trust's outstanding stand-alone program bonds.

Jefferson Health bonds price

Elsewhere, the Chester County Health and Education Facilities Authority and the Hospitals and Higher Education Facilities Authority of Philadelphia priced Tuesday $355 million in series 2010 health system revenue bonds (Aa3/AA/AA) for Jefferson Health System, said a pricing sheet.

The offering included $165 million in series 2010A bonds sold through the Chester County authority and $190 million in series 2010B bonds sold through the Philadelphia authority.

The 2010A bonds are due 2011 to 2023 with term bonds due 2030, 2031 and 2040. The serial coupons range from 2% to 5.25%. The term bonds all have 5% coupons. The full pricing data was not immediately available.

The 2010B bonds are due 2011 to 2023 with term bonds due 2030 and 2040. The coupons range from 2% to 5.25%. The 2030 bonds have a 5.25% coupon, and the 2040 bonds have a 5% coupon.

Citigroup Global Markets Inc. was the senior manager.

Proceeds will be used to finance an addition and improvements to the system's Paoli Hospital and to refund existing debt.

The Chester County authority, based in West Chester, Pa., provides funding for educational and health-care projects. The Philadelphia authority also provides funding for educational and health-care projects.

The health system is based in Radnor, Pa.

South Carolina sells notes

In other news, the South Carolina Association of Governmental Organizations priced Tuesday $179.474 million in series 2010A tax anticipation notes, said a term sheet.

The notes (MIG 1) were sold competitively with Wells Fargo Securities Inc. winning the bid with a 0.38% net interest cost.

The 2% notes are due April 15, 2011 and were priced at 101.247.

Proceeds will be used to finance a variety of school projects ahead of the collection of certain taxes.

San Juan USD brings deal

Also during the day, the San Juan Unified School District of California priced $55 million in series 2010 general obligation bonds, said Mike Dencavage, the district's chief financial officer.

The bonds (Aa2/A+/) were sold competitively with UBS Securities LLC winning the bid. The true interest cost came in at 4.512074%.

Dencavage said the district received authorization in 2002 to issue up to $350 million of the bonds. The bonds priced Tuesday are merely an installment of a larger deal, Dencavage noted.

"This installment will continue the Measure J program of modernization of the district's school facilities in Carmichael, Orangevale, Citrus Heights, Arden-Arcade, Gold River and Fair Oaks," Dencavage said in an interview.

"This is a 10-year program with nearly 800 projects identified."

The Measure J bond sale is expected to be completed in 2012.

There were four bidders in Tuesday's sale: UBS, Citigroup, Morgan Stanley & Co. Inc. and Wells Fargo Bank, NA.

Capitol Public Finance Group LLC was the financial adviser.

The bonds are due 2011 to 2030 with term bonds due 2032 and 2034. The serial coupons range from 2.25% to 5%. The 2032 bonds have a 5% coupon, priced at 102.777, and the 2034 bonds have a 5% coupon, priced at 101.974.

Proceeds will be used to construct and modernize school facilities.

The district is based in Carmichael, Calif.

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