Rhode Island Economic Development brings $180 million; Connecticut details $309 million G.O. sale

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, March 18 - Market conditions were much-improved for municipals Wednesday following the beating the market took Tuesday, insiders said, while the primary market remained very active.

Activity was led by $482.79 million in series 2009 mental health services facilities improvement revenue bonds from the Dormitory Authority of the State of New York, a sellside source said, but the pricing terms were not immediately available Wednesday. The sale included $443.675 million in series 2009A1 bonds and $39.115 million in series 2009B1 bonds. Goldman, Sachs & Co. was the senior manager.

The authority also priced $52.195 million in series 2009 revenue bonds for Pratt Institute through lead manager TD Bank.

Meanwhile, the Rhode Island Economic Development Corp. priced $179.125 million in grant anticipation and revenue bonds for the Rhode Island Department of Transportation, according to spokesman Jon Duffy.

The deal consisted of $167.82 million series 2009A grant anticipation bonds due 2010 to 2021 and $11.305 million series 2009A motor fuel tax revenue bonds due 2010 to 2027.

Citigroup Global Markets Inc. acted as the lead underwriter for the negotiated deal.

Rhode Island Economic Development is based in Providence, R.I.

Connecticut prints $309 million

Also in New England, the Connecticut priced $309 million in three tranches of general obligation bonds on Tuesday, according to a source familiar with the deal.

"The deal went very well," she said, but the yields were about at the levels anticipated.

Retail accounts brought $159 million worth of the interest, she said, which was encouraging.

The state priced $80 million series 2009A taxable bonds due 2010 to 2019 at a true interest cost of 5.29%.

The state also priced $155 million in series 2009B new money bonds due 2010 to 2023 at a TIC of 3.35% and $74.2 million series 2009C refunding bonds due 2010 to 2017 at a TIC of 2.96%.

Morgan Stanley & Co. Inc. acted as lead underwriter for the negotiated deal.

Proceeds will be used to finance projects and refund existing debt.

Alaska to bring $165 million

Looking ahead, Alaska intends to price $165 million in series 2009A G.O. bonds, according to a preliminary official statement.

The competitive sale is expected to take place April 2.

Scott Balice Strategies LLC is the financial adviser.

The bonds (Aa2/AA+/AA) are due 2010 to 2029.

Proceeds will be used to reimburse the state's general fund for certain expenses, as well as fund the state's 2008 transportation projects.

Secondary improves

Moving to the secondary market, a trader told Prospect News that conditions improved markedly over Tuesday. Volume also improved, he noted.

"It's a lot better," the New York-based trader said. "We're down a few basis points and we're seeing a lot of stuff moving today."

Looking to specific trades, Wake County, N.C.'s recently priced $502 million in series 2009C refunding bonds received a lot of interest, said one trader.

The 5% issue due 2012 was seen at 1.58%.

The state of Ohio's University of Dayton revenue bonds were also trading. The 4% issue due 2015 was seen at 3.6%.

In recently freed-to-trade bonds, King County, Wash.'s series 2009 G.O.s moved Wednesday. The 5.125% 2036s were seen at 5.13%. The bonds priced Monday to yield 5.26%. On Wednesday, the 5.125% 2033 bonds were trading at 5.15%. On Monday, the bonds were priced at 5.22%.

The Metropolitan Transportation Authority of New York's 5.625% 2039 bonds from its series 2009A dedicated tax fund bonds were seen trading at 5.693%.

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