Munis have quiet day as primary calendar fills; New Jersey plans $400 million NJ Transit bonds

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, April 13 - As the municipals market got back down to business following the Easter holiday, the market remained fairly quiet and the primary calendar began piling up for a busy week.

"There's good supply out there," said one sellsider reached during the afternoon.

"I expect good demand as well. We're still a little cheap. I think retail is going to eat up a lot of what's out there for the week. It's probably a trend we'll see for as long as municipals are as cheap as they are now."

Still, in the area surrounding the nation's capital, there was "some follow through" from Henry County in Maryland as well as the Virginia College Building Authority deal, said a trader focused on the region.

This coming week, Richmond, Va., will bring $146.495 million, the trader said.

"Richmond is a nice G.O. name" that has been scarce lately, the trader said.

It will be accompanied by a competitive $59.265 million deal from Charles County in Maryland, and both are expected to be well received, the trader said.

In the broader market-space, the recent successes on the equity side have encouraged new risk in all sectors, but eventually the strong performance may begin to siphon cash away from Treasuries and municipals, the trader said.

Such heavy support for equities will not likely come until "people start to feel the comfort level coming back," the trader said, once "people actually start getting some decent mortgages."

Anne Arundel County

In other news, an issuer said his recent offering priced much better than it would have had it gone a few months earlier.

Rick Drain, controller for Anne Arundel County in Maryland, said he was pleased with the pricing the county's recent $144.6 million sale of series 2009 general obligation bonds.

"This is actually my first go-around," Drain said of the sale. "I think it went pretty well. I was a little concerned [given current market conditions], but I think we did pretty well. If it had been in December, it would have been a whole different story."

Wachovia Securities Inc. won the competitive bid on Wednesday with a true interest cost of 3.7%. There were nine bidders for the sale, Drain sale.

Proceeds will be used for improvements to county facilities, including water and sewer systems.

In reoffering news for the bonds, the 4.25% 2028 improvement bonds were seen at 4.4% Monday. The 3% 2019 water and sewer bonds were trading at 3.03%. The 4% 2024 water and sewer bonds were trading at 3.772%.

The Anne Arundel County seat is Annapolis.

New Jersey Transit

Coming up this week, the State of New Jersey is expected to price $398.58 million in certificates of participation for New Jersey Transit on Thursday following a retail order period Wednesday, said a calendar of sales.

The COPs will be sold through lead managers Citigroup Global Markets Inc. and J.P. Morgan Securities Inc.

The proceeds will be used to purchase equipment, which will be subleased to New Jersey Transit.

Also this week, the Municipal Improvement Corporation of Los Angeles is gearing up to price $109.06 million in series 2009 lease revenue bonds Wednesday, according to a sales calendar.

The deal includes $56.83 million in series 2009A bonds (A2/AA-/AA-) and $52.23 million in series 2009B bonds (A1/AA-/AA-).

The lead manager for the series 2009A bonds is Citigroup Global Markets. The senior manager for the 2009B bonds is Siebert Brandford Shank & Co. LLC.

The 2009A bonds are due 2010 to 2019, and the 2009B bond are due 2010 to 2023 with term bonds due 2028 and 2039.

Proceeds will be used to repay commercial paper notes, pay for capital improvements and pay for real property.

Florida Municipal Power

Also coming on Wednesday is a $170.435 million sale of series 2009 all-requirement power supply revenue bonds from the Florida Municipal Power Agency, said a calendar of upcoming deals.

The bonds (A1//A+) will be sold through senior manager Merrill Lynch & Co. Inc.

Proceeds will be used to construct the agency's Cane Island Unit No. 4 and finance obligations to Public Gas Partners Inc. under a gas supply agreement.

Yet another sale scheduled for Wednesday comes from the Turnpike Authority of Kentucky. The authority is set to bring $153.15 million in series 2009A economic development road revenue bonds (Aa3/AA+/AA-), said an offering calendar.

The bonds will be sold through lead manager Goldman, Sachs & Co.

The bonds are due 2011 to 2029, and proceeds will be used to pay a portion of costs related to public highway projects. The remainder will be used to refund the authority's series 2007 bonds.

Gophers ARRP bonds

The University of Minnesota plans to issue a $35 million tranche as Build America Bonds, which were authorized under the America Recovery and Reinvestment Act.

The $35 million will come as part of an $85 million G.O. 20-year offer, expected on Wednesday, according to university spokeswoman Patty Mattern.

Build America Bonds are taxable bonds that may take the place of tax-exempt bonds in cases when federal subsidies are offered to cover lending costs. In exchange, the Treasury Department will pay the university 35% of each interest payment for the 20-year life of the bonds.

The University of Minnesota is the first university to issue bonds under the ARRP, and the program is expected to save the university approximately $2 million in borrowing costs over the life of the bonds, according to Carole Fleck, University of Minnesota Board of Regents debt manager.

Wells Fargo Brokerage Services and Wachovia Securities will act as underwriters for the negotiated issue.

Proceeds from the sale will be used for the acquisition and maintenance of school land and facilities.

The main campus is located in Minneapolis.

NYC bonds trade

In secondary market action, the City of New York's recently priced series 2009I-1 bonds were moving. A trader said the bonds were still drawing a lot of interest in the secondary market.

The 5.45% 2031s were seen trading at 5.072% in the mid-afternoon. Later, the bonds were seen trading at par. The 4.625% 2020s were trading at 4.55% in mid-afternoon. The 2020s, a trader said, were seeing some wild movements through the day, moving between 6 and 10 basis points.

Elsewhere, the 5% 2025s were trading at 5.034%.

"We're not seeing a lot of stuff moving today, but good demand for what is out there," said one trader.

"It feels pretty flat today."

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