Week's offerings are bigger in size, but fewer in number; Los Angeles USD to sell $950 million Wednesday

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, Jan. 30 - Billions in muni sales are planned for the week ahead, but the actual number of sales expected is rather limited. The biggest offering of the week comes from the Los Angeles Unified School District, which will bring $950 million in general obligation bonds to market Wednesday.

A market source reached earlier in the latest week said he feels the volume is normal for this time of year, noting that an influx of deals postponed from 2008 made volume much heavier than usual at the beginning of January.

Some sources, however, have contended that the municipals market is only open for pricing in windows and that some issuers are waiting for the ideal moment in which to price their deals.

In the Los Angeles sale, the district will price the bonds (/AA-/) through senior manager Barclays Capital Inc. and Morgan Stanley & Co. Inc.

Proceeds will be used to construct new schools and improve existing schools and school facilities.

Georgia sale ahead

Also coming up, the State of Georgia will bring $613.85 million in series 2009 G.O. bonds Tuesday, according to a calendar of upcoming sales.

The bonds will be sold through lead manager Merrill Lynch & Co.

The offering includes $61.795 million in series 2009A bonds, which are due 2010 to 2014, and $552.055 million in series 2009B bonds, which are due 2010 to 2029.

Proceeds will be used to improve and develop lands, waterways, buildings, highways and state facilities.

In other large sales, the Dormitory Authority of the State of New York's $418.035 million in series 2009 state personal income tax revenue bonds are expected to price Tuesday, said a preliminary official statement.

The sale includes $148.855 million in series 2009A education bonds, $93.76 million in series 2009A healthcare bonds, $24.55 million in series 2009A state facilities and equipment bonds and $150.87 million in series 2009A economic development and housing bonds.

The bonds will be sold on a negotiated basis with Citigroup Global Markets Inc. as the senior manager. Proceeds will be used for capital grants to local schools and health-care systems as well as economic development grants under a wide variety of state programs.

Massachusetts Water deal

Also ahead, the Massachusetts Water Resources Authority plans to price $328.88 million in series 2009 revenue and refunding bonds Wednesday, according to a calendar of upcoming offerings.

The bonds (//AA) will be sold with J.P. Morgan Securities Inc. and Citigroup Global Markets as the lead managers.

The sale includes $98 million in series 2009A general revenue bonds and $230.88 million in series 2009B general revenue refunding bonds. Both bonds are due 2010 to 2029 with term bonds due 2034 and 2039.

Proceeds will be used to improve the state's water infrastructure and refund outstanding bonds.

The Kentucky Economic Development Finance Authority is scheduled to sell its previously announced $217.47 million in series 2009A hospital revenue bonds for Baptist Healthcare System Thursday, according to a sales calendar.

The bonds (Aa3//AA-) will be sold through senior manager Goldman, Sachs & Co.

Proceeds will be used to reimburse the health-care system for the construction and equipment of a new patient and surgery tower at Baptist Hospital East in St. Matthews, Ky. The rest will be used for the construction of other improvements.

Broward sale Thursday

Elsewhere, Broward County in Florida plans to sell its previously announced $179.955 million in series 2009A water and sewer revenue bonds Thursday, according to a sellside source.

The bonds (Aa3/AA/AA) will be sold through senior managers Citigroup Global Markets and Ramirez & Co.

The bonds are due 2010 to 2029 with a term bond due 2032.

Proceeds will be used for improvements to the county's water treatment plants.

Washington Healthcare deal

In other upcoming sales, the Washington Healthcare Facilities Authority in Washington state announced the offer of $100 million series 2008A and 2008B revenue bonds, according to a preliminary statement.

The bonds are split into two $50 million tranches. Both have serial maturities from 2009 to 2014 and term bonds due 2019, 2024, 2029 and 2039.

Merrill Lynch is senior manager for the deal.

Proceeds will be used to fund hospital expansion and maintenance.

Looking a bit further out, the State of Oregon Department of Administrative Services plans to issue $229.4 million in 2009 series A and series B certificates of participation on Feb. 11, said Jack Kenney, the department's finance manager.

The offering includes $214.14 million in 2009 series A COPs, which are tax-exempt serial bonds due from 2010 to 2028 with term bonds due 2033 and 2039.

The non-tax-exempt $15.26 million in 2009 series B COPs are due 2018 and 2023.

Banc of America Securities LLC and Citigroup are underwriters for the negotiated offer.

Proceeds from the sale will be used to fund the expansion and improvement of a state psychiatric hospital.

Northeastern bonds price

Moving to some pricing action, the Massachusetts Health and Educational Facilities Authority priced $63.825 million in series 2009 revenue and revenue refunding bonds (A2) for Northeastern University Friday, said an official statement.

The sale included $38.28 million in series 2009Y-1 revenue bonds and $25.545 million in series 2009Y-2 refunding revenue bonds.

The 2009Y-1 bonds are due 2009 to 2019 with a term bond due 2029. The serials have coupons from 3% to 5% and yields from 2.15% to 4.8%. The 2029 bond has a 5.625% coupon to yield 5.85%.

The 2009Y-2 bonds are due 2009 to 2019 with a term bond due 2024. The serials have coupons from 3% to 5% and yields from 2% to 4.8%. The 2024 bond has a 5.5% coupon to yield 5.625%.

Barclays Capital was the underwriter for the negotiated deal.

Proceeds will be used to reimburse the university for some construction costs.

D.C. water bonds

Also priced in the latest week was a $300 million offering of series 2009A public utility senior lien revenue bonds (Aa3/AA/AA-) from the District of Columbia Water And Sewer Authority, said chief financial officer Olu Adebo. The bonds priced Wednesday, but terms were not released until Friday.

Coupons ranged from 3% to 5% for the serial bonds, which are due 2010 to 2019.

For the term bonds, due 2024, 2029, 2039 and 2035, coupons ranged from 4.85% to 5.58%.

Morgan Stanley was lead underwriter for the negotiated bonds.

Proceeds are intended to be used for improvements to the system and to refinance existing debt.

Secondary improves

Moving to the secondary market, traders said the tone of the market improved quite a bit on Friday, following a week of little movement.

"We're looking a touch better today," said one trader reached in the afternoon.

"On the long end, I'd say we're down a couple of basis points. All this week, we've held steady and that seems to be the case today, too."

In specific trades, the series 2009Y-1 revenue bonds the Massachusetts Health and Educational Facilities Authority sold for Northeastern University were trading Friday. The 5.625% 2029s were seen trading Friday afternoon at 5.624%. The bonds priced late Thursday with terms finalized Friday morning. The 2029s were priced to yield 5.85%.

Also recently priced, the Lancaster County School District of Nebraska's G.O. school bonds saw some trading action Friday. The 4% 2021s were trading at 3.7%.

Yet another bond that priced earlier in the week was trading on Friday. East Baton Rouge, La.'s series 2009 road and street improvement bonds were moving with the 5% 2025s seen at 4.938%. The 2025s were priced on Wednesday to yield 5.16%.

One trader said the Allen Independent School District of Texas received solid demand in secondary for its recently priced school building bonds. The 5% 2021s were trading at 4.16%, and the 5% 2022s were seen at 4.36%. The 5.25% 2029s were seen at par. The 5.25% 2034s were trading at 5.38%.

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