Munis remain mostly unmoved in light activity; Washington State plans $765 million G.O. sale

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, July 6 - As the municipals market got back down to work following the Independence Day holiday, market insiders said there was little to report, even as California's general obligation bonds were downgraded to BBB by Fitch.

Market sources reached Monday had little to say about the ratings downgrade, but the state's budget concerns could impact the largest sale of the week - a $1.039 billion sale out of the City of Los Angeles.

More broadly, many traders and underwriters were still filtering back in from the long weekend, a trader said.

"I've been busy," he said, but with an understaffed desk it was difficult to determine whether the flows were at a genuinely high level.

The secondary market, another trader noted, was little changed with low volume.

"There's not much to report," the trader added.

L.A. to sell $1.04 billion

Moving back to the sale from Los Angeles, the city plans to price $1.039 billion in series 2009 tax and revenue anticipation notes (MIG 1/SP-1+/F1+) on Thursday.

Goldman, Sachs & Co. is the senior manager for the notes, which are due June 30, 2010.

Proceeds will fund cash flow management for revenues and expenditures.

Washington's $765 million G.O.s

Also out West, the State of Washington announced plans Monday to sell $765.115 million in series 2010 general obligation bonds on July 14, said a preliminary official statement.

The sale includes $298.8 million in series 2010A various purpose G.O. bonds, $401.41 million in series 2010B motor vehicle fuel tax G.O.s and $64.905 million in series 2010T taxable G.O. bonds.

The bonds will be sold competitively with Seattle-Northwest Securities Corp. and Montague DeRose & Associates LLC as the financial advisers.

The 2010A bonds are due 2017 to 2034, and the 2010B bonds are due 2010 to 2034. The 2010T bonds are due 2010 to 2016.

Proceeds will be used to pay or reimburse the state for various capital expenditures, state buildings and higher education facilities. The proceeds will also be used for farmland preservation, multimodal transportation projects, water supply development projects and riparian conservation.

Providence Health sale planned

In other news out of California, the California Health Facilities Financing Authority plans to sell $150 million in series 2009B revenue bonds for Providence Health & Services, said a preliminary official statement. The bonds, according to a sales calendar, are scheduled to price July 16.

The bonds (Aa2/AA/AA) will be sold through lead manager Merrill Lynch & Co. Inc.

The maturities have not yet been determined.

Proceeds will be used to construct, acquire and equip health facilities for Providence Health in Mission Hills, Calif.

Atlantic City deals bonds

Moving to the East Coast, the Atlantic City Board of Education, N.J., announced that it will sell a $50.321 million G.O. bond, according to a preliminary notice of sale.

The competitive auction will be held on July 15.

The bonds will mature in 2034 but are callable on Aug. 15, 2019.

Proceeds will be used to fund educational projects throughout the city.

Secondary nearly flat

Market insiders said Monday that municipals were still very sleepy to start out the week following the long weekend.

"Not a lot is going on today," said one trader reached in the afternoon.

"It was slow going, for certain. People are still out on vacation, I think. What's moving out there is relatively unchanged."

Among the slight activity were the Pennsylvania Economic Development Authority's recently priced bonds sold for Aqua America Inc. The 5% 2039 bonds were seen at 5.05%. The bonds priced June 30 at 5.23%.

In other trades, the North Fort Bend Water Authority of Texas also saw its bonds moving Monday. The 5.25% 2034 bonds saw a lot of interest, one trader said, and were seen trading at about 5%.

Also, the certificates of participation issued by the City of Charlotte, N.C., were seen in action. The 4.25% 2023 bonds were seen at par Monday.

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