Munis kick off week largely unmoved; Chicago O'Hare to bring $1.17 billion in airport bonds

By Sheri Kasprzak

New York, April 12 - Municipal yields were mostly flat on Monday, with spotty gains seen on the longer end of the yield curve, market insiders reported.

"I'd call it flat," one trader said. "Out long, yields might be lower by 1 basis point or so."

Amid Monday's trading action, the Greater Orlando Aviation Authority's series 2010B refunding revenue bonds were moving. The 4.25% 2018 bonds were trading at 4.242%.

Elsewhere, the Illinois Finance Authority's bonds sold for Alexian Brothers Health System were trading as well. The 5.125% 2028s were trading at 5.435%.

Meanwhile, primary action for the week was stacking up. The activity will be led by the City of Chicago's $1.167 billion sale of series 2010 revenue bonds for the Chicago O'Hare International Airport. That offering is scheduled for Tuesday, said a sales calendar.

"I'd expect to see pretty decent demand for this, particularly from institutional investors," said one sellsider connected to the deal.

"I'm sure there will be some retail interest. There's certainly enough pieces here to draw a wide range of buyers. I think it will go well for them."

Deal includes several tranches

The deal includes $112.67 million in series 2010A general airport third-lien non-AMT revenue bonds, $557.18 million in series 2010B general airport third-lien Build America Bonds, $175.83 million in series 2010C general airport third-lien non-AMT bonds, $55.38 million in series 2010D general airport third-lien revenue refunding bonds, $45.915 million in series 2010E general airport third-lien revenue refunding bonds, $92.9 million in series 2010F general airport third-lien non-AMT revenue bonds, $41.345 million in series 2010A passenger facility charge non-AMT bonds, $48.76 million in series 2010B passenger facility charge non-AMT bonds, $21.95 million in series 2010C passenger facility charge taxable bonds and $15.205 million in series 2010D passenger facility charge refunding bonds.

Bank of America leads syndicate

The airport bonds (A1/A-/A) will be brought to market on a negotiated basis with Bank of America Merrill Lynch as the senior manager.

Proceeds from the sale will be used to refund commercial paper notes as well as modernize Chicago O'Hare International Airport.

University of California bonds ahead

Coming up on Wednesday, the State Public Works Board of the State of California is set to bring $499.935 million in series 2010 lease revenue bonds for the University of California, according to a calendar of upcoming deals.

The bonds (A1/BBB+/BBB+) will be sold through RBC Capital Markets Corp. and Southwest Securities Inc.

Proceeds will fund a variety of capital projects at the University of California's campuses.

The board, based in Sacramento, provides funding for a variety of nonprofit organizations and public higher educational facilities throughout the state.

Grant County utility bonds planned

Looking to Thursday's pricings, the Public Utility District No. 2 of Grant County in Washington state is set to price $344.555 million in series 2010 Priest Rapids Hydroelectric Project revenue bonds, said a sales calendar.

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

The sale includes $39.475 million in series 2010A non-AMT bonds, $10.935 million in series 2010B AMT bonds, $166.445 million in series 2010L Build America Bonds, $90 million in series 2010M new clean renewable energy bonds and $37.7 million in series 2010Z taxable bonds.

The 2010A bonds are due 2011 to 2023, and the 2010B bonds are due 2011 to 2018. The 2010L bonds are due 2020, 2025, 2030 and 2040, and the 2010M bonds are due 2027. The 2010Z bonds are due 2020, 2025, 2030 and 2040.

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

The county seat is Ephrata, Wash.

Lone Star deal to price

Out on the horizon, the State of Texas is expected to price $185.44 million in series 2010 general obligation bonds, said a preliminary official statement.

The sale includes $143.745 million in series 2010B water financial assistance bonds and $41.695 million in series 2010C water financial assistance bonds.

The bonds (Aa1/AA+/AAA) will be sold through senior manager Barclays Capital Inc.

The 2010B bonds are due 2011 to 2030, and the 2010C bonds are due 2010 to 2030.

Proceeds will be used to fund water development projects and to refund existing debt.

St. Luke's Hospital to price

In other upcoming deals, the Northampton County General Purpose Authority of Pennsylvania is expected to price $102.365 million in series 2010 hospital revenue bonds for St. Luke's Hospital, said a preliminary official statement.

The sale includes $91.975 million in series 2010A bonds and $10.39 million in series 2010B bonds.

The bonds (A3/BBB+/) will be sold on a negotiated basis with Bank of America Merrill Lynch as the senior manager.

Proceeds will be used to finance capital projects for St. Luke's Hospital in Bethlehem, Pa., as well as refund the hospital's series 1992, 1993 and 2007 bonds.

The authority, based in Easton, Pa., acquires, constructs, finances, holds and improves hospitals and related facilities within the county.

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