Volume Expands as Cal State and Maryland Lead the Way

The municipal market is poised to welcome an estimated $5.16 billion in total new volume his week - the highest level in recent months - anchored by a $450 million revenue issue from the California State University Trustees and $510.5 million of general obligation bonds from Maryland.

By comparison, last week, the market saw a revised $3.83 billion in total negotiated and competitive volume, according to Thomson Reuters.

The university deal is the largest negotiated deal on the calendar and the largest in California this week. Scheduled for pricing on Thursday by Barclays Capital after a retail order period on Wednesday, the bonds are tentatively structured as serial and term bonds, but the exact maturities were not available at press time on Friday. The bonds are rated Aa3 by Moody's Investors Service and A-plus by Standard & Poor's.

The only other sizable deal in the state will be up to $136 million of GOs from San Francisco being sold on Wednesday in the competitive market. The bonds are structured with maturities from 2009 to 2029.

The bonds, which are backed by the city's ad valorem taxes, are rated Aa2 by Moody's, AA by Standard & Poor's, and AA-minus by Fitch, and proceeds will be used to finance earthquake safety improvements at the San Francisco General Hospital and Trauma Center.

Northeast activity will center on the Maryland GO sale, which has natural triple-As from all three rating agencies and includes $410 million of negotiated bonds and $100 million of competitives.

The negotiated portion of the deal is expected to be priced by Merrill, Lynch & Co. tomorrow, following today's conclusion of a three-day retail order period. That part of the deal has two series - the larger of which is $325 million of Series A bonds that will mature serially from 2012 to 2024, as well as an $85.5 million Series B refunding component that includes maturities in 2010, 2011, and 2012 only.

The negotiated GO offering will precede the sale of at least $100 million of Series C GOs from Maryland on Wednesday in the competitive market, structured with serial bonds maturing from 2012 to 2024.

Elsewhere in the Northeast, $401.5 million of state revolving fund bonds from the Massachusetts Water Pollution Abatement Trust is also expected to add to the region's new issues this week when Morgan Stanley prices the deal for institutions on Wednesday, following a planned retail order period today and tomorrow.

The bonds, which have natural triple-As from all three credit agencies, will be structured as serial bonds maturing from 2009 to 2028, with term bonds expected from 2029 to 2038.

Boston also will sell $123.5 million of GO debt in the competitive market on Thursday. The deal is structured with two components, the larger of which is a $100 million Series 2009A, which will mature from 2010 to 2029 and will finance various capital projects of the city, including bridge and sidewalk construction projects, urban renewal, and park improvements, as well as public works and utilities. Series B, meanwhile, consists of $23.5 million of bonds maturing from 2010 to 2019 that will refund outstanding debt from Series 1998C, Series 2001A, and Series 2002A bonds, according to the preliminary official statement.

Another large deal taking place in the Northeast is a $400 million sale of building aid revenue bonds from the New York City Transitional Finance Authority expected to be priced by Goldman, Sachs & Co. on Wednesday, following a two-day retail order period that begins today.

The revenue bonds, which will be structured as serials maturing from 2011 to 2029 and term bonds in 2034 and 2039, are rated A1 by Moody's, AA-minus by Standard & Poor's, and A-plus by Fitch.

Moving West, Utah will issue $430 million of GOs in a Morgan Stanley-led negotiated deal that is planned for pricing tomorrow following today's retail order period. Structured to mature serially from 2010 to 2024, the bonds have natural triple-As from Moody's, Standard & Poor's, and Fitch.

One of the only other sizable deals on the calendar this week is $300 million of hospital revenue bonds from Catholic Health East planned for pricing on Wednesday by Merrill.

The multi-state deal consists of bonds being issued on behalf of Catholic Health by municipalities in four states - New Jersey, Georgia, Pennsylvania, and Massachusetts.

However, the details about the sizes of each component and their structures were not available at press time on Friday, according to a source at the firm.

Finally, Ohio's Cuyahoga County Community College District plans to enter the market tomorrow with a $125 million fixed-rate revenue bond issue that will be the 46-year-old district's largest bond sale to date.

Proceeds will finance capital projects as well as pay off $30 million in tax anticipation notes the district sold last year. The new debt will nearly triple its current outstanding debt.

KeyBanc Capital Markets Inc. is senior manager on the deal. NatCity Investments Inc., Huntington Investment Co., and Stifel Nicolaus & Co. are also on the team. Roetzel & Andress LPA is bond counsel.

In advance of the sale Moody's assigned an Aa3 rating to the bonds. Standard & Poor's assigned a AA-minus.

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