Municipals round out week unmoved; California Statewide Development gears up for $1.5 billion

By Sheri Kasprzak

New York, Nov. 6 - The municipal bond market remained unmoved once again ahead of a $1.5 billion sale of revenue bonds from the State of California.

Meanwhile, the S&P National AMT-Free Municipal Bond Index began November modestly down, reported James Rieger, vice president of fixed income indices at Standard & Poor's.

"The market has seen stable yields so far this month, with the weighted average yield to maturity of bonds in the index holding at about 3.9% or a taxable equivalent yield of 5.43%," Rieger wrote Friday.

"Yields on municipal bonds rose during October based on a steady stream of new issuance and uncertainty about the impact of the economy on state and local coffers. States like California, where there is more economic uncertainty, have seen greater yield spread widening. Issuance is still below previous years and the supply of tax-exempt bonds is impacted by the success of the Build America Bond taxable bond program."

Looking to the coming week, the California Statewide Development Authority is expected to sell $1.5 billion in series 2009 State of California Proposition 1A receivables program revenue bonds (Baa1/A/BBB) through Goldman, Sachs & Co.

The bonds are due June 15, 2013.

Proceeds will be used to repay borrowing from local property taxes.

Meanwhile in the secondary market Friday, the Dormitory Authority of the State of New York's series 2009 revenue bonds for the Hospital for Special Surgery were trading. The 6% 2038 bonds were seen at 4.678%.

Also seen trading were Allina Health of Missouri's recently priced revenue bonds. The 5.25% 2028s were trading at 5.073% Friday.

Children's Hospital sale planned

Elsewhere, on Monday the Massachusetts Health and Educational Facilities Authority is set to sell $125 million in series M revenue bonds (Aa2/AA/) for the Children's Hospital through Goldman.

Proceeds from the deal will be used to fund capital projects.

Also Monday, the Suffolk County Water Authority of New York is scheduled to price $180.535 million in series 2009 water system revenue bonds (/AA+AA+) will be sold on a competitive basis with Goldman as the financial adviser.

The offering includes $66.395 million in series 2009A bonds, which are due 2011 to 2035; $14.14 million in series 2009 refunding bonds, which are due 2011 to 2022; and $100 million in series 2009B Build America Bonds, which are due 2033 to 2035.

Proceeds will be used to finance the authority's five-year capital program, which includes improvements to the county's water and sewer system, as well as refund existing debt.

Missouri HEFA prices bonds

Among deals pricing, details of the Health and Educational Facilities Authority of the State of Missouri sale of $181.485 million in series 2009 health facilities revenue bonds for Children's Mercy Hospital were released.

The bonds (/A+/) are due 2011 to 2024 with term bonds due 2029, 2033 and 2039. The serials have coupons from 2% to 5.125%. The 2029 bonds have a 5.25% coupon priced at 97.968 and the 2033 bonds have a 5.5% coupon priced at 98.38. The 2039 bonds have a 5.625% coupon priced at 97.817.

Piper Jaffray & Co. was the senior manager for the sale, which was conducted Thursday.

Proceeds will be used to construct and equip certain facilities operated by the hospital.

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