Underwriters of tax-exempt bonds were kept busy yesterday with a $1.2 billion new-issue slate, but traders continued to complain about the lack of bonds in the secondary.

For the most part, new issues again new drew very good support from investors with the competitive deals down to respectable balances. In the negotiated sector, yields were fine-tuned to fit the wishes of buyers and lowered in cases where interest was strong.

A $300 million offering of Metropolitan Water District of Southern California revenue bonds topped the negotiated calendar and reached the market through an underwriting account led by Bear, Stearns & Co.

The deal included $61.5 million terms bonds, due 2021, priced at 89 as 6s to yield 6.87%, $92.2 million term bonds of 2018 offered at 98 as 6 3/4s to yield 6.914, and $44.6 million term bonds of 2012 offered as 6 5/8s with a 6.85% return. Serial yields ranged from 4.75% in 1992 to 6.75% in 2006 with the 2007 and 2008 maturities not formally reoffered.

A couple of the serial maturities came in at yields five to 10 basis points lower than the preliminary pricing and the return on the 2021 term maturity was shaved by one basis point.

The issue is rated double-A by Moody's Investors Service and Standard & Poor's Corp.

In another negotiated offering, an account headed by Kidder, Peabody & Co. marketed $214.7 million Philadelphia Municipal Authority, Pa., justice lease revenue bonds, most of which came as insured bonds. Yields were sweetened as much as 10 basis points for some of the insured serial maturities and 20 basis points for the uninsured term bonds. But the return for one of the insured term bonds was trimmed by two basis points.

Yields on the $132.7 million Financial Guaranty Insurance Co.-backed bonds ranged from 5.40% in 1993 to 7.10% in 2006 with the $28.4 million term bonds of 2011 priced at 99 1/2 as 7.10s to yield 7.146% and the $61.5 million term bonds of 2018 offered at 99.30 as 7 1/8s to yield 7.18%.

The serial returns were the same for the $40.2 million MBIA Corp.-backed series --5.40% in 1993 to 7.10% in 2006.

The $41.7 million unenhanced bonds were priced at 97.719 as 8 5/8s to yield 8.85%.

The insured bonds are rated triple-A by Moody's and Standard & Poor's. Ratings were not applied for on the uninsured series, which are being offered only to institutional investors.

In the competitive arena, accounts headed by First Boston Corp. won both major issues -- $186 million Regents of University of California revenue bonds and $174.5 million Phoenix, Ariz., various purpose unlimited tax bonds.

The California issue sold down to a $62.2 million balance; the Phoenix issue showed a $37 million balance.

The University of California offering was comprised of $115.2 million 6 3/4 term bonds of 2023 -- all placed with permanent investors and not formally reoffered -- and serial bonds scaled from 6% in 1997 to 6.90% in 2011.

The issue is backed by AMBAC Indemnity Corp. and rated triple-A by Moody's and Standard & Poor's.

The Phoenix issue included $28 million term bonds, due 2016, offered as 6 1/4s to yield 6.90% and $39.7 million term bonds of 2011 offered as 6 1/2s to yield 6.85%. An officer at First Boston said that there will be a slight Street float in the 2011 maturity, but that all of the 2016 term bonds were out of the market with strong priority business.

Yields on the Phoenix serial bonds were scaled from 5.40% in 1994 to 6.80% in 2008.

The bonds are rated AA-plus by Standard & Poor's and Aa by Moody's.

Returning to the negotiated market, a Goldman, Sachs & Co. account priced $110 million Dade County, Fla., aviation revenue alternative minimum tax bonds with a maximum yield of 7.10% in 2006.

The $51.5 million maximum yield bonds were offered at 96.765 as 6 3/4s. The 7.10% return was five basis points lower than the yield at the preliminary pricing. Returns for the serials ranged from 5.30% in 1993 to 6.95% in 2003.

The bonds will carry a double-A rating from Moody's and a single-A rating from Standard & Poor's.

Back in the competitive sector, a Kidder, Peabody & Co. group reported all bonds sold for a $35 million triple-A Missouri full faith and credit water pollution control bond issue. The issue is known among dealers as a "museum piece" because of its infrequent trips to the market. The last time Missouri sold bonds was in July 1987.

Reoffering yields on the issue ran from 4.40% in 1991 to 6% in 2001, 6.50% in 2006, 6.60% in 2011, and 6.65% in 2016.

A Goldman, Sachs & Co. account reported a $4.3 million balance for $20 million Mississippi GO bonds scaled out to 6.80% in 2011. The bonds are rated Aa by Moody's and AA-minus by Standard & Poor's.

In the secondary dollar bond market, traders said that the actively quoted names were unchanged on the day, but that off-the-run issues were being bid $1 to 1/8 point lower late in the session.

New Jersey Turnpike Authority 7.20s of 2018 were quoted near the close at 103-103 1/4 to yield 6.64% to the 1999 par call and 6.81% to the 1993 premium call. New York LGAC 7s of 2016 closed at 961/4-1/2 to yield 7.31% to maturity.

In the note sector, the market for New York tax and revenue anticipation notes was at 5.52% bid, 5.45% offered. New Jersey and Los Angeles Country notes were being offered at 5%.

Negotiated Pricings

Wisconsin Housing and Economic Development Authority, $97.6 million home ownership revenue bonds.

Ratings: Moody's Aa (expected); Standard & Poor's A-plus (expected).

Yields were shaved five basis points for the long serial bonds of the $37.6 million series 1 non-AMT issue. Serial returns now range out to 7% in 2003. The term bond returns remained at 7.05% in 2005 and 6.50% for the super sinkers of 2011, but a 2006 term maturity yielding 7.125% was added.

The coupon for the $30 million series 2 SAVRs stayed at 4.375%, but the coupon for the $30 million series 3 residual interest bonds was reduced to 9.475% from 9.572%.

The bonds were marketed through an account headed by Lehman Brothers. The verbal award was received yesterday.

Virgin Islands Water and Power Authority, $81 million electric system revenue bonds, 1991 series A.

Ratings: Fitch BBB-minus.

The $70 million term bonds were offered at 97.95 as 7.40s to yield 7.60%. The serial bonds were priced at par to yield from 5.75% in 1992 to 6.90% in 1996.

PaineWebber Inc. was senior manager for the underwriters. The verbal award was received yesterday.

Crowley Independent School District, Tex., $40.7 million unlimited tax school building refunding bonds.

Ratings; Moody's Aaa; Standard & Poor's AAA. AMBAC insured.

The current interest bonds were tentatively priced to yield from 4.80% in 1992 to 7% in 2011. Yields on the zero coupon bonds were tentatively set at 7.05% in 2012 and 2013 and &.10% in 2014-16.

The issue is being negotiated by an account led by Southwest Securities.

Iowa Finance Authority, $30 million single-family mortgage revenue bonds, 1981 series A & B (FNMA/GNMA).

Ratings: Moody's AAA (expected); Standard & Poor's AAA (expected).

All bonds were priced at par.

The non-AMT current interest series was comprised of serials scaled from 5.60% in 1994 to 7% in 2005, super sinkers yielding 6.50% in 2011, and term bonds returning 7.25% in 2016.

The alternative minimum tax bonds will yield 7.45% in 2023.

The bonds were marketed through an account headed by PaineWebber Inc. The verbal award was received yesterday.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.