Munis end session flat; Virginia Public School Authority sells $70.09 million of school bonds

By Sheri Kasprzak

New York, April 26 - The week's supply dropped substantially on Thursday, leaving the municipals market mostly unchanged, traders reported during the session.

"Trading has slowed and primary is slower, and there's very little pushing us," one trader said.

"There might still be a little weakness around 10 years, but it's very slight. Overall, for today I'd call it unchanged. I suspect the next week might be very similar. Supply is probably going to be fairly subdued."

The largest offering of the coming week will likely be a $1.8 billion sale of general obligation refunding bonds from the State of Illinois.

Virginia school bonds price

Leading the day's competitive action, the Virginia Public School Authority came to the market with $70.09 million of series 2012B school financing bonds, according to a pricing sheet.

The bonds (Aa1/AA+/AA+) were sold competitively with Bank of America Merrill Lynch winning the bid, state debt manager Evelyn Whitley said in an interview. The true interest cost came in at 2.822713%.

The bonds are due 2013 to 2032 with 2.5% to 5% coupons.

"The authority typically sells bonds for the pooled bond program twice a year - spring and fall," Whitley said.

"It's a conduit program for localities in the commonwealth. The authority's bonds are used to purchase local school bonds issued by the participating localities. Debt service payments on the local school bonds to the authority provide for the debt service on the authority's bonds."

To qualify for the program, schools must submit applications to participate based on their capital project funding needs, Whitley told Prospect News.

"In this issue, eight Virginia localities participated," she said.

California preps Stanford sale

Looking to upcoming sales, the State of California is expected to price $495.14 million of tax-exempt bonds to help fund the construction of the new Stanford Hospital in Palo Alto, said Tom Dresslar, spokesman for state treasurer Bill Lockyer's office.

The offering to finance the hospital will be part of a $575 million offering to be conducted in mid-May through the California Health Facilities Financing Authority, said Dresslar. The construction is expected to cost about $2 billion.

The new 820,000 square-foot hospital will include 368 private patient rooms. The current facility, which will be renovated and remain open, will have 214 private and semi-private rooms. The facility will also include 28 flexible surgical and interventional operating rooms, a 40,000-square-foot imaging department, a 39,000-square-foot emergency department, a new level-one trauma center and surgical, diagnostic and treatment rooms.

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