Yields improve on better Treasuries; California Department of Water brings almost $3 billion

By Sheri Kasprzak

New York, May 5 - Municipal yields were firmer on Wednesday after Treasuries rallied. Meanwhile, the primary market continued to dominate investor interest, with the California Department of Water Resources leading the action.

The department priced nearly $3 billion in an upsized offering of series 2010L power supply revenue bonds. The bonds (Aa3/AA-/AA-) received a big reception, said one sellsider familiar with the offering.

"Retail was hugely interested in this one," said the sellsider.

"There was a two-day retail period, and they just ate these bonds up. It's a really good-quality name out in California. I think retail wanted to go after to these because it's a high-quality California name, which is pretty rare. Yields came in pretty good, I think. For a California name, it was very good."

The department priced $2.968 billion after setting out to bring $2 billion.

Morgan Stanley & Co. Inc., E.J. De La Rosa & Co. Inc. and J.P. Morgan Securities Inc. were the senior managers.

The bonds are due 2011 to 2012 and 2014 to 2022 with coupons from 2% to 5%.

Proceeds will be used to refund existing bonds.

The department, based in Sacramento, manages the state's water resources.

Treasuries improve

Meanwhile, in the broad market, traders reported a firmer tone to the market, thanks to a Treasuries rally.

"Treasuries are having a good day, so we're having a decent day, too," said one trader.

"It wasn't a fantastic change. Overall, yields are down by about a basis point or so, maybe a little more out long."

Massachusetts prices

In other primary action, the Commonwealth of Massachusetts sold $450 million in series 2010A general obligation consolidated loan Build America Bonds on Wednesday, said a term sheet.

The bonds (Aa1/AA/AA+) were sold competitively with Morgan Stanley winning the bid. Siebert Brandford Shank & Co. LLC was the financial adviser.

The bonds are due 2024 to 2027 with a term bond due 2029. The serial coupons range from 4.48% to 4.76%, all priced at par. The 2029 bonds have a 4.91% coupon, also priced at par.

Proceeds will be used to finance capital projects.

Long Island Power sells

Elsewhere, the Long Island Power Authority of New York sold $210 million in series 2010B Build America Bonds on Wednesday, said a pricing sheet.

The bonds were sold through Citigroup Global Markets Inc.

The bonds are due 2020 to 2022 and 2024 to 2026 with a term bond due 2041. The serial coupons range from 4.85% to 5.7%. The 2041 bonds have a 5.85% coupon, priced at 99.919.

Proceeds will be used to fund capital expenditures.

The authority, based in Uniondale, N.Y., acquires real property and purchases power from the New York State Power Authority.

Authority sells Philly bonds

Also during the day, the Pennsylvania Intergovernmental Cooperation Authority brought $206.96 million in series 2010 special tax revenue bonds, said a pricing sheet.

Goldman, Sachs & Co. was the lead manager.

The bonds (Aa2/AA/AA+) are due 2011 to 2022 with coupons from 4% to 5%.

Proceeds will be used to contribute to the Philadelphia Funding Program, which assists small-business entrepreneurs.

The Philadelphia-based authority handles the finances of the City of Philadelphia.

Wyandotte brings $150.37 million

In other pricing news Wednesday, the Unified Government of Wyandotte County and Kansas City, Kan., priced Wednesday $150.37 million in series 2010B sales tax special obligation capital appreciation revenue bonds, said a pricing sheet.

The zero-coupon bonds are due June 1, 2021 and were priced to yield 6.07%.

Citigroup was the lead manager.

Proceeds will fund a portion of the costs associated with constructing a multi-sport athletic arena.

Stamford sale ahead

Looking out on the horizon, the State of Connecticut Health and Educational Facilities Authority is set to bring $104.56 million in series 2010-I revenue bonds for Stamford Hospital, said a preliminary official statement.

The bonds (/A/) will be sold through senior manager Goldman Sachs with Bank of America Merrill Lynch as the co-manager.

The bonds are due 2011 to 2021 with term bonds due 2025 and 2030.

The hospital plans to use the proceeds granted it by the authority to finance and refinance renovations and additions to existing hospital facilities.

Located in Hartford, the authority assists qualified health-care systems, nursing homes, educational institutions and child-care providers finance projects. The hospital is located in Stamford.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.