Municipals finish the week unmoved; primary market stacks up for the coming week

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, July 24 - As new offerings pile up for the coming week, municipals were little changed on Friday, market insiders said. Volume in the secondary market remained fairly quiet, said one trader.

"It is a real snoozer," he said. "Nothing is moving, and we're really feeling mostly unchanged."

Another trader agreed: "It's a slow summer."

In the little action that crossed the desk, "govvies were selling, but munis were hanging in there," he said.

In the capital region, the trader saw good interest already building for the $485 million Maryland state and local facilities loan of 2009 general obligation bonds, he said.

On July 15, there was a North Carolina Turnpike deal, which has done "very well," he said.

The $234.91 million and $35.173 million of bonds priced at 4.6% to 5.8% yields and 6.74% to 7.1% yields, respectively.

Also, AMT bonds have become more popular, he said.

On Friday, the North Dakota Housing Agency announced an offering of $53.425 million of AMT bonds as part of a larger offer.

North Dakota Housing to price

The North Dakota Housing Finance Agency plans to offer $133.425 million of series 2009 AMT and non-AMT bonds, chief financial officer Patrick Nagel.

The $80 million of series 2009A non-AMT bonds will consist of $50.39 million of serial bonds due from 2010 to 2019 and term bonds due 2034 and 2039. Proceeds from the series A bonds will be used to make loans under the agency's housing finance program.

"We can make $1.1 million in loans each day," Nagel said.

The money is needed, but the irregular timing of the issue has more to do with a larger issue last fall and "a lot of snow slowed things down for a month or so" over the winter, he said.

"It is so busy out here, our appraisers are running weeks behind," he said.

Another possibility the agency considered to fund daily operations was a "GIC loan," Nagel said, from GIC Housing Finance Ltd.

However, "with interests the way they are," GIC loans were practically not available, he said.

The remaining $53.425 million of series 2009B AMT bond will be one variable-rate term bond due July 1, 2030. Proceeds from the series B bonds will be used to refund outstanding debt.

After the $53.425 million is used to retire roughly 12 older series of bonds at the end of their maturities, nearly $800 million of outstanding debt will remain on the books.

RBC Capital Markets Corp., Merrill Lynch Banc of America Securities LLC, Morgan Stanley & Co. Inc. and Piper Jaffray & Co. will act as underwriters for the negotiated deal scheduled to price on Thursday.

The North Dakota Housing Finance Authority is located in Bismarck, N.D.

Northern Illinois power bonds

The Northern Illinois Municipal Power Agency will sell $160 million of series 2009A-C power project revenue bonds, according to a preliminary offering notice.

The series A bonds will come as non-taxable revenue bonds with serial maturities from 2016 to 2029 as well as term bonds.

The series B bonds will be taxable with serial maturities from 2013 to 2016 as well as term bonds.

Series C will come as Build America Bonds with serial maturities from 2016 to 2029 also with term bonds.

No amounts have been set for any tranche.

Citigroup Global Markets Inc., BMO Capital Markets GKST Inc., J.P. Morgan Securities Inc., Morgan Stanley & Co. Inc. and Wachovia Capital Markets LLC will act as underwriters for the negotiated deal.

Proceeds will be used to fund the construction of a coal-fired generating station.

The Northern Illinois Municipal Power Agency is located in Rochelle, Ill.

King County sale Monday

Coming up on Monday, King County in Washington is scheduled on Monday to come to market with $250 million of series 2009 sewer revenue bonds (/AA+/), said a sales calendar.

The bonds, which are due 2013 to 2049, will be brought by Barclays Capital Inc.

Proceeds will be used to fund improvements to the county's sewer system.

Secondary flattens

Moving to the secondary market on Friday, traders said there was little trading activity to report and that the tone of the market was fairly unmoved.

Among the light trading action was the Iowa Finance Authority's health facilities revenue bonds sold for Iowa Health System. The 5.625% 2035 bonds were seen on Friday afternoon at 5.447%. The 5% 2019s were seen at 4.46%.

Elsewhere, the New York City Transitional Finance Authority's recently priced secured bonds were seen in action. The 4.5% 2017 bonds were seen at 4.53%.

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