Dealers and investors in tax-exempt securities continued to focus on new issues yesterday, lending their support to a $372.5 million Triborough Bridge and Tunnel Authority refuding bond offering and a $319.3 million Connecticut note issue.
Activity in the secondary was again muted as traders watched underwriters absorbing this week's $3.7 billion bond calendar -- a 1991 high -- and more than $4.5 billion of notes. But dollar bonds managed to squeak out price gains of about 1/8 point and notes were unchanged, but firm, as traders awaited allotments on Tuesday's $4.1 billion California issue.
The TBTA offering reached the market through an underwriting account headed by Dean Witter Reynolds & Co. and carries a maximum yield of 6.86% for $72 million term bonds of 2017 priced at 97.182 as 6 5/8s. A $97.7 million term maturity of 2019 was offered at 90 as 6s producing a 6.81% return.
Serial yields ranged from 5% in 1993 to 6.75% in 2007.
Investor demand was strong enough to allow underwriters to reduce yields on the serial bonds by five basis points and shave the return for the maximum yield maturity by two basis points from the levels at the preliminary pricing.
The issue is backed by MBIA Corp. and rated triple-A by Moody's Investors Service and Standard & Poor's Corp.
Proceeds from the sale will be used to refund a portion of the authority's outstanding mortgage recording tax special obligation bonds issued under the 1988 MRT resolution.
Yesterday's veto of the proposed state budget by Gov. Lowell P. Weicker failed to stop the Connecticut note offering and by the results of the sale did not deter investors from putting their money on the line.
The offering was oversubscribed at the initial pricing of 100.358 as 5 1/4 to yield 4.70% and underwriters led by Merrill Lynch & Co. decided to boost the price to 100.423, reducing the yield to 4.60%. The notes will be dated Aug. 13, 1991, and will mature April 15, 1992. They are rated MIG-1 by Moody's, SP1-plus by Standard & Poor's, and F1-plus by Fitch Investors Service.
An official at Merrill Lynch reported "strong retail interest and tax-exempt money and bond fund buying, both Connecticut and general market, and some corporate and insurance company business." About 25% of the priority book was lost after the aggressive repricing, but the deal still got done, he said.
The Merrill Lynch official also pointed out that the 4.60% return on Connecticut is the lowest currently available in the note market. The big California note issue of Tuesday -- still in syndicate -- carries a 4.75% yield for notes maturing June 30, 1992. Note traders said yesterday that they expected the California notes to trade up in price after syndicate restrictions are lifted.
In another negotiated financing, a Goldman, Sachs & Co. account market $265.2 million Cook County, Ill., general obligation bonds and attracted very strong priority business. The account estimated late yesterday that about 90% of the loan would be done on a priority basis.
The offering included $47.4 million term bonds of 2021 priced at 91 5/8 as 6 1/4s to yield 6.913%, $80.8 million term bonds of 2018 offered at 97 1/4 as 6 3/4s to yield 6.976%, and $17 million term bonds of 2011 priced at 97 as 6 5/8s to yield 6.901%. The final returns on the term bonds were two basis points lower than those at the preliminary pricing.
The serial bonds were scaled from 5% in 1992 to 6.85% in 2007 and the capital appreciation bonds returned 6.90% in 2004 and 7% in 2008 and 2009.
The bonds are insured by AMBAC Indemnity Corp. and are rated triple-A by Standard & Poor's and Moody's.
Prices were revised to boost yields five to 10 basis points for the $132.9 million State of Missouri-sponsored Regional Convention and Sports Complex Authority bonds payable from annually renewable lease payments by the state.
Serial yields now run out to 6.90% in 2006 with the term bonds returning 6.95% in 2011 and 7.05% in 2021.
The issue is rated Al by Moody's, A-plus by Standard & Poor's, and AA by Fitch.
Yields were unchanged for the $66.2 million St. Louis County sponsored portion of the offering, ranging from 5.10% in 1992 to 7% in 2006, 7.10% in 2011, and 7.20% in 2021.
This portion of the offering is rated A by Moody's, BBB-plus by Standard & Poor's, and A-plus by Fitch.
The City of St. Louis portion of the offering was repriced Tuesday with the 2001 maturity carrying a 7.75% return and the 2021 maturity yielding 8.169%.
These bonds are rated BBB-minus by Fitch.
Smith Barney, Harris Upham & Co. is senior manager for all three offerings.
Negotiated Pricings
Pima County, Ariz., $57.5 million sewer revenue refunding bonds, series 1991.
Ratings: Moody's Aaa; Standard & Poor's AAA. FGIC insured.
The offering was comprised of: $35.2 million term bonds, due 2015, priced at 98 1/2 as 6 3/4s to yield 6.91%; $11.3 million term bonds of 2007 offered at 99 1/2 as 6.70s to yield 6.751%; and serials scaled from 4.60% in 1992 to 6.35% in 2001.
The bonds were marketed through an account headed by Rauscher Pierce Refsnes Inc. The official award is expected tomorrow.
Illinois Health Facilities Authority, $51.5 million revenue refunding bonds, series 1991 (Sherman Hospital project).
Ratings: Moody's Aaa; Standard & Poor's AAA. MBIA insured.
The $28.6 million term bonds, due 2021, were priced at 96 1/8 as 6 3/4s to yield 7.062%. The $14.9 million term bonds of 2011 were offered at 97 1/4 as 6 3/4s to yield 7.008%. The serials were scaled from 4.85% in 1992 to 6.60% in 2001.
Bear, Stearns & Co. and William Blair & Co. are co-managers for the underwriters. The formal award is expected today.
New York State Housing Finance Agency, $47.2 million service contract obligation revenue bonds, 1991 series C.
Ratings: Moody's A; Standard & Poor's BBB-plus.
The $38.4 million term bonds, due 2021, were priced at 98 7/8 as 7.30s to yield 7.39%. The $8.8 million term bonds of 2012 were offered at 99 1/2 as 7.30s to yield 7.35%.
Bear, Stearns & Co. was senior manager for the underwriters. The written award is expected today.
Dunedin, Fla., $27.6 million hospital revenue bonds, series 1991 (Mease Health Care).
Ratings: Moody's Aaa; Standard & Poor's AAA. MBIA Insured.
The offering has been restructured and now includes three term maturities: $17.7 million of 2021 priced at 97.236 as 6 3/4s to yield 6.97%; $5.4 million of 2011 priced at 98.160 as 6 3/4s to yield 6.92%; and $2.5 million 6.80s of 2006 that are not formally reoffered.
Serial yields are at 6.40% in 2001, 6.50% in 2002, and 6.60% in 2003.
Merrill Lynch & Co. and Smith Barney, Harris Upham & Co. are co-managers. The verbal award has been received.
