Yields close mostly unchanged; State Public Works Board of California sells $449.17 million

By Sheri Kasprzak

New York, April 15 - Municipal yields were largely unmoved on Thursday in light trading action, market insiders reported. The bulk of buyers were focused on the primary side of the market, a trader told Prospect News.

"Everyone is looking at new issues," he said.

"There's not a lot going on in secondary. We're looking really pretty flat. There might be a little bit of improvement on the short side, inside of five years, but only around 1 bps."

Another trader said he saw some decent interest in the City of Chicago bonds sold for the Chicago O'Hare International Airport, but not as much as he thought the bonds would draw.

"Honestly, I'd expected to see more interest in secondary," he said.

"Some maturities were more popular than others. The long bonds [due 2040] seemed to pull in the most buyers today."

The series 2010A third-lien general airport refunding bonds were seen moving. The 5.375% 2032 bonds were trading at 5.5%. The 2010B bonds were also seen in secondary. The 6.395% 2040s were seen at 6.238%.

California public works prices

Meanwhile on the primary side, the State Public Works Board of the State of California sold $449.165 million in series 2010 lease revenue bonds for California State University and the University of California, said pricing sheets.

The sale included $82.9 million in series 2010B-1 bonds for California State, $96.805 million in series 2010B-2 taxable bonds for California State, $69.355 million in series 2010C-1 bonds for the University of California, $149.62 million in series 2010C-2 taxable bonds for the University of California and $50.485 million in series 2010D taxable bonds for the University of California.

The 2010B-1 bonds are due 2013 to 2026 with term bonds due 2030 and 2035. The serials have coupons from 3% to 5.4%. The 2030 bonds have a 5.625% coupon, priced at par, and the 2035 bonds have a 5.7% coupon, priced at 99.596.

The 2010B-2 bonds are due 2035 with a 7.804% coupon, priced at par.

The 2010C-1 bonds are due 2012 to 2026 with term bonds due 2030 and 2035 with coupons from 3% to 5%. The 2030 bonds have a 4.75% coupon, priced at 99.358, and the 2035 bonds have a 5% coupon, priced at par.

The 2010C-2 bonds are due 2025 and 2035. The 2025 bonds have a 6.282% coupon, priced at par, and the 2035 bonds have a 7.004% coupon, also priced at par.

The 2010D bonds are due 2014 to 2020 with term bonds due 2025 and 2035. The serial coupons range from 3.624% to 5.432%, all priced at par. The 2025 bonds have a 6.282% coupon, priced at par, and the 2035 bonds have a 7.004% coupon, also priced at par.

The bonds (A1/BBB+/BBB+) were sold on a negotiated basis with RBC Capital Markets Corp. and Southwest Securities Inc. as the senior managers.

Proceeds will be used to fund a variety of capital projects at California State University's and the University of California's campuses.

The board, based in Sacramento, oversees fiscal matters associated with construction projects throughout the state.

Grant County utility district sells bonds

Elsewhere, the Public Utility District No. 2 of Grant County in Washington state priced Thursday $294.145 million in series 2010 Priest Rapids Hydroelectric Project revenue and refunding bonds, said a pricing sheet.

The sale included $166.445 million in series 2010L Build America Bonds, $90 million in series 2010M taxable bonds and $37.7 million in series 2010Z taxable bonds.

The bonds (Aa3/AA-/AA) were sold on a negotiated basis with Citigroup Global Markets Inc. as the lead manager.

The 2010L bonds are due 2018 to 2027 with term bonds due 2030 and 2040. The serial coupons range from 4.361% to 5.63%. The 2030 bonds have a 5.73% coupon, priced at 99.92, and the 2040 bonds have a 5.83% coupon, priced at 99.906.

The 2010M bonds are due 2027 with a 5.63% coupon, priced at 99.926.

The 2010Z bonds are due 2011 to 2020 with term bonds due 2025, 2030 and 2040. The serial coupons range from 1.55% to 4.611%, all priced at par. The 2025 bonds have a 5.411% coupon, priced at par, and the 2030 bonds have a 5.73% coupon, priced at 99.92. The 2040 bonds have a 5.83% coupon, priced at 99.906.

Proceeds from the sale will be used to finance improvements to the Priest Rapids project as well as refund existing debt.

The district, based in Ephrata, Wash., operates electric-producing properties, including the Electric System and the Priest Rapids Hydroelectric Project.

Michigan State sale planned

Looking to upcoming sales, the Board of Trustees of Michigan State University is planning to sell $410 million in series 2010 general revenue bonds, said a preliminary official statement.

The offering includes $205 million in series 2010A Build America Bonds and $205 million in series 2010B tax-exempt bonds.

The bonds (Aa2/AA/) will be sold through lead managers Bank of America Merrill Lynch and J.P. Morgan Securities Inc.

The 2010A bonds are due 2044 to 2050. The maturities for the series 2010B bonds have not been set.

Proceeds will be used to construct, furnish and equip a replacement for Morrill Hall; renovate, remodel and equip Brody Hall; renovate and equip the university's dining facilities; upgrade the university's payroll system; upgrade and renovate Bailey and Emmons halls; and upgrade the university's power plant.

The university is based in East Lansing, Mich.

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