Muni market hits strong tone; Chicago shortens retail period, prices $1.05 billion of bonds

By Cristal Cody and Sheri Kasprzak

Tupelo, Miss., April 26 - The municipal bond market remained "very strong" on Tuesday as the City of Chicago sold $1.048 billion of series 2011 third-lien revenue and passenger facility charge revenue financing bonds for the Chicago O'Hare International Airport, according to sources.

The bonds were seen pricing to yield 6% on the 2039 maturity, a trader said.

"The Chicago deal was supposed to have a two-day retail order period. They did the institutional today as well," a source said. "It was very well received."

The final pricing terms were not immediately available.

The bonds were sold through senior managers Citigroup Global Markets Inc. and Siebert Brandford Shank & Co. LLC. The co-managers were Barclays Capital Inc., Estrada Hinojosa & Co. Inc., Jackson Securities Inc., Jefferies & Co., Melvin & Co., Morgan Keegan & Co. Inc., PNC Capital Markets LLC, Ramirez & Co. Inc., Rice Financial Products Co. and Toussaint Capital Partners LLC.

Proceeds will be used to make capital improvements at the airport, to refund grant anticipation bonds and commercial paper notes and to make debt service payments.

Rochester sells Mayo bonds

On Tuesday, details were released about the City of Rochester, Minn.'s recent sale of $285 million of series 2011 health-care facilities revenue bonds on behalf of the Mayo Clinic.

The bonds (Aa2/AA/) were priced through Merrill Lynch and Wells Fargo Securities LLC.

The deal was comprised of $88 million of series 2011A bonds, $62 million of series 2011B bonds and $135 million of series 2011C bonds.

The 2011A bonds are due in 2030 and have a 4% coupon priced at 103.349. The 2011B bonds are due in 2038 and have a 4% coupon priced at 103.349. The 2011C bonds are due in 2038 and have a 4.5% coupon priced at 102.359.

Proceeds will be used to refund the clinic's series 1992 and 2001 bonds.

Maryland brings mortgage bonds

Also in recent pricings, the Maryland Community Development Administration detailed its $90.825 million sale of series 2011 residential revenue bonds (Aa2//AA) in an official statement released Tuesday.

The offering included $70.825 million of series 2011A non-AMT bonds and $20 million of series 2011B non-AMT indexed-rate bonds.

The 2011A bonds are due 2012 to 2023 with term bonds due in 2026, 2030 and 2041. The serial coupons range from 0.375% to 4.25%. The 2026 bonds have a 4.75% coupon priced at par, and the 2030 bonds have a 5.125% coupon priced at par. The 2041 bonds have a split maturity with a 5% coupon priced at 105.972 and a 5.375% coupon priced at par.

The 2011B bonds are due March 1, 2036 and bear interest at the Sifma rate plus 95 basis points. They priced at 99.5.

Merrill Lynch was the senior manager for the 2011A bonds and the sole underwriter for the 2011B bonds.

Proceeds will be used to make mortgage loans.

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