Munis close unchanged to firmer; North Carolina preps $500 million capital improvement bonds

By Sheri Kasprzak

New York, Jan. 26 - Municipal yields were unchanged to slightly better on Wednesday in light to moderate trading action, market insiders reported.

"In the middle [of the curve], yields are better by about 3 basis points," said one trader.

"Out long, maybe 1 to 2 [bps], and short bonds are flat."

Despite the widespread woe painted in the mass press, market insiders have taken to defending municipals as an asset class. A conference call was held Wednesday by DWS Investments' municipals desk in response to recent reports that mass defaults and bankruptcies loom in the market.

Ashton Goodfield, head of municipal bond trading at DWS, noted during the call that there are over 50,000 municipal issuers and only 1% of those issuers account for 64% of the total par amount of debt outstanding.

"Most of the muni bonds that come to market are very small, roughly $30 million in size. The vast majority of the par amount in the market is a small amount of issuers," she said.

She noted that these large issuers that make up the majority of the debt issued have a greater need to access the capital markets and therefore are less likely to resort to defaults or bankruptcies.

North Carolina preps sale

Looking to upcoming offerings, the State of North Carolina is slated to come to market with $500 million of series 2011A capital improvement limited obligations on Feb. 2, said a preliminary official statement.

The bonds (Aaa/AA+/AAA) will be sold competitively with First Southwest Co. as the financial adviser.

The bonds are due 2012 to 2031.

Proceeds will be used to finance improvements and upgrades at a variety of higher educational facilities throughout the state as well as make land purchases and improvements to other state facilities.

Tufts bonds price

In Wednesday's light primary action, the Massachusetts Development Finance Agency priced $49.835 million of series 2011P revenue bonds for Tufts University, said a pricing sheet. The deal was downsized from $50.52 million.

The bonds (Aa2/AA-/) are due Feb. 15, 2036 and have a 3% coupon to yield 2.7%.

Barclays Capital Inc. and J.P. Morgan Securities LLC were the senior managers.

Proceeds will be used to refund the university's outstanding series 2001I revenue bonds.

Based in Boston, the agency provides funding for health-care and educational facilities throughout the commonwealth. The university is based in Medford.

Dasny, PANYNJ deals set

Two major offerings will come to market on Thursday. The Port Authority of New York and New Jersey will price $300 million of 166th series consolidated bonds.

Those bonds will come competitively and are due 2030 to 2041.

Proceeds will be used to fund capital projects and refund debt.

Also on Thursday, the Dormitory Authority of the State of New York is set to price $275 million of series 2011A revenue bonds (Aaa/AAA/) for Columbia University through Morgan Stanley & Co. Inc., Bank of America Merrill Lynch and JPMorgan.

Proceeds will be used to design, construct and install various improvements and upgrades to the university, which is located in New York City.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.