Baton Rouge brings $165 million; Transmission Agency of Northern California sells $128 million

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, April 30 - Municipals once again suffered some weakness Thursday as Treasuries continued to experience drops.

"We're off a bit today, just along with Treasuries," said one trader reached late in the day.

Primary action was relatively healthy, but terms were still being hammered out on Citizens Property Insurance Corp.'s planned $2 billion sale of series 2009A-1 (A2/A+/) and series 2009A-2 senior secured bonds (MIG 1/SP-1+/). Goldman, Sachs & Co. was the manager.

One market source said Thursday that he thought the Jacksonville, Fla.-based corporation was conducting a retail order period Thursday.

The 2009A-1 bonds are due 2016, and the 2009A-2 bonds are due 2010.

Proceeds will be used for reserve accounts.

Earlier in the week, market insiders suggested the bonds would be priced cheaply.

Elsewhere in primary action, the Industrial Development Authority of Maricopa County in Arizona was also still putting together the terms on its $590.6 million sale of series 2009 variable-rate bonds for Catholic Health Facilities Financing Authority on behalf of San Francisco-based Catholic Healthcare West.

Janis Larson, administrator for the authority, said the terms were not available by the end of the day Thursday.

J.P. Morgan Securities Inc. and Citigroup Global Markets Inc. were the lead managers.

Proceeds will pay for capital expenses at Catholic Healthcare West and to refund current interest bonds.

East Baton Rouge

In the bonds that did price on Thursday, the East Baton Rouge Sewerage Commission in Louisiana priced $164.965 million series 2009 sewer system revenue bonds at an all-in true interest cost of 5.36% (A1/AA-/AA-) on Wednesday, according to Gordon King, financial adviser for Government Consultants of Louisiana Inc.

The sale was originally scheduled at an amount of $164.965 million, although many reports indicated that the commission would sell $350 million, King said.

"We went out pretty aggressively," King said, hoping for 120 basis points over MMD on the short end and 100 bps over MMD on the long end.

The short end came back as expected, but the long end priced tighter at 92 bps over MMD, he said.

Merrill Lynch & Co. Inc. acted as lead underwriter for the negotiated deal.

The bonds carry serial maturities from 2016 to 2029 with term bonds maturing in 2034 and 2039.

In reoffering news, the 5.25% 2039s were seen at 5.084% Thursday afternoon after pricing at 5.4%, and the 5.25% 2034s were seen reoffered near par after pricing at 5.37%. The 4% 2018 bonds were reoffered at 3.86% after pricing at the same level, and the 4% 2019s were reoffered at 4.03% after pricing at 4.06%.

Proceeds will be used to fund capital improvements to the sewer system.

Northern California Transmission

The Transmission Agency of Northern California priced $128.815 million in series 2009 California-Oregon Transmission Project revenue refunding bonds at an all-in TIC of 4.605% (Aa3/A+/A+), according to assistant treasurer Tim Ryan.

The $67.005 million tax-exempt series A bonds carry maturities from 2016 to 2024. The bonds were broken into retail and institutional subtranches worth $16.850 million and $50.155 million, respectively. The retail bond due 2020 as well as the institutional bonds due 2020 to 2024 will be callable at par on May 1, 2019.

The $61.810 million taxable series B bonds carry maturities from 2011 to 2016.

"We were pretty well happy on the taxable side," Ryan said, but the agency was forced to offer more to sell the tax-exempt bonds.

"We came a little back on the exempt side," he said.

The 5.17% 2014 B bonds were reoffered Thursday at 5.14% after pricing at par. The 3.69% 2011 bonds were seen reoffered at 3.3% after pricing at par. The 5.37% 2015 bonds were reoffered at 5.05% . The bonds were priced Thursday at 5.35%.

JPMorgan acted as lead underwriter.

Proceeds from the sale will be used to refund series 2003 bonds.

The Transmission Agency of Northern California is located in Sacramento.

Oklahoma County ISD

Oklahoma County Independent School District No. 89 priced $54 million general obligation bonds at a TIC of 3.43%, according to Chris Gander, a financial adviser for the Oppenheim division of Bosc Inc.

Robert W. Baird & Co. won the auction over two competing bidders, although four other bids came late due to a misunderstanding about the auction times, Gander said.

The serial bonds will carry maturities from 2009 to 2024 with amounts of $3.855 million per bond.

The bonds due 2020 to 2024 will be callable after July 1, 2019.

Proceeds from the sale will be used for general budgetary purposes.

Oklahoma County Independent School District No. 89 is located in Oklahoma City.

Washington Health Care

Washington Health Care Facilities Authority in Washington State priced $100 million in two equal tranches of series 2009A and 2009B revenue bonds, according to Donna Fincke, spokeswoman for the authority.

The deal priced at 40 bps over MMD, and interest will be paid at a weekly rate.

Merrill Lynch, Pierce, Fenner & Smith Inc. was scheduled to act as lead underwriter for the 2009A bonds.

JPMorgan and Wells Fargo Brokerage Services LLC were slated to have the lead for the 2009B bonds. Kaufman, Hall & Associates acted as financial adviser for the negotiated deal.

The bonds' final maturity will come in 2044 while the bonds due 2040 to 2044 will be subject to mandatory sinking fund redemptions.

Proceeds will be used to acquire and maintain hospital facilities.

The authority is located in Olympia, Wash.

More Build America Bonds

Coming up in the next few weeks, the State of Louisiana is expected to price $155 million in series 2009A-2 taxable gasoline and fuels second-lien revenue Build America bonds, said a preliminary official statement.

The bonds (Aa3/AA/), which are due May 1, 2043, bear interest at Libor.

The Build America Bonds will be sold through Morgan Keegan & Co.

The sale is expected to take place in early May.

Proceeds will be used to construct highways and bridges.

Southern Illinois University

In other Build America Bonds news, Southern Illinois University plans to price $53.92 million in series 2009A housing and auxiliary facilities system revenue bonds, said a preliminary official statement.

The offering will be brought to market Tuesday, according to a sellsider familiar with the deal.

The bonds (A1/A+/) will be sold on a negotiated basis with BMO Capital Markets GKST Inc. and Barclays Capital Inc. as the senior managers.

The deal includes $5.98 million in series 2009A-1 tax-exempt bonds and $47.94 million in series 2009A-2 Build America Bonds.

The A-1 bonds are due 2011 to 2013. The A-2 bonds are due 2014 to 2027 with a term bond due 2030.

Proceeds will be used to construct a new football stadium and to make renovations to existing arenas.

The university is based in Carbondale, Ill.

Secondary weakens

Meanwhile, in secondary market action, a trader said volume remained fairly good, despite a weaker tone. The municipals market took a hit Thursday thanks to continued weakness in the Treasuries market.

In specific trading action, the New Jersey Turnpike Authority's series 2009E bonds were seen moving. The 5% 2028 bonds were seen at 4.637%, and the 7.414% 2040 Build America Bonds were seen at 6.713%.

Charles County, Md.'s recently priced public improvement bonds were also in action. The 5% 2018 bonds were seen at 5.09%.

The State of Tennessee's series 2009B bonds were also seen trading Thursday. The 3.25% 2020s were seen at par.

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