Municipals lose ground with yields up by 2-3 bps; Atlanta brings $433.44 million in bonds

By Sheri Kasprzak

New York, Oct. 13 - Municipals once again saw some weakness as the market continued to give back some recent firmness, market insiders said.

"We're easily up 2 to 3 basis points today, pretty much all over [the yield curve]," said one trader reached in the afternoon.

"This is basically our Monday, so it's been really quiet. Not a lot going on, but it's not that surprising."

The coming week will provide plenty of supply to municipals investors, with several large deals coming to market Tuesday.

"It's not that odd," said one sellsider when asked about the healthy supply in a shortened week.

"Columbus Day isn't exactly a big travel holiday, so most people are just back to work. The next few days we have a really good supply."

Meanwhile, Tuesday's primary action was headlined by a $433.435 million sale of series 2009B water and wastewater revenue bonds from the City of Atlanta.

The city sold the bonds (Aa2/AAA/AA+) through senior managers Goldman, Sachs & Co., SunTrust Robinson Humphrey Inc. and Terminus Securities.

The bonds are due 2010 to 2024 with term bonds due 2027, 2034 and 2039. The coupons range from 2% to 5.5%.

Proceeds will be used to refund the city's series 2001B and 2001C bonds.

Mississippi to bring $622.82 million

Looking ahead, the State of Mississippi is slated to sell $622.82 million in series 2009 general obligation bonds and G.O. refunding bonds on Wednesday through Morgan Keegan & Co. Inc., Morgan Stanley & Co. Inc. and Merrill Lynch & Co. Inc.

The deal includes $340.375 million in series 2009D taxable G.O. bonds, $120 million in series 2009E taxable G.O. bonds, $64.145 million in series 2009F tax-exempt G.O. bonds and $98.3 million in series 2009G G.O. Build America Bonds.

Proceeds will be used to refinance the state's series 2008 bonds, fund highway improvements throughout the state, fund grant programs for local governments to expand businesses and refund existing variable-rate bonds.

University of Massachusetts plans issue

Elsewhere on Wednesday, the University of Massachusetts Building Authority is scheduled to price $524.75 million in series 2009 project revenue bonds (Aa3/A+/).

Citigroup Global Markets Inc. and J.P. Morgan Securities Inc. are the lead managers.

Proceeds will be used to fund improvements at a variety of projects at the university's campuses.

Washington to price $500 million

In the West, Washington State is expected to bring $500 million in series 2010D motor vehicle tax G.O. Build America Bonds (Aa1/AA+/AA) on Wednesday.

JPMorgan and Goldman Sachs are the senior managers.

Proceeds will be used to fund state and local highway improvements.

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