Municipal yields close out the week firmer; Chicago BOE preps $407.13 million G.O. bond sale

By Sheri Kasprzak

New York, Oct. 8 - Municipal yields were yet again firmer, down by about 2 basis points, on Friday amid fairly moderate secondary action, said a trader reached in the afternoon.

"It's looking pretty good again," he said.

"Yields are down by 2 bps or so. We're actually seeing some activity in secondary. It's fairly busy for a change, so I'm assuming the primary stuff that's priced over the past few weeks is finally starting to move."

Among the secondary activity were the California Department of Water Resources' series 2010M power supply revenue bonds. The 5% 2013 bonds were seen at 0.95% on Friday afternoon after pricing at 1.12% on Thursday.

Primary supply for the week ahead is subdued compared to recent weeks. The headliner for the coming week is a $407.125 million sale of series 2010 unlimited tax general obligation bonds from the Board of Education of the City of Chicago on Wednesday.

The deal includes $257.125 million in series 2010C qualified school construction bonds and $150 million in series 2010D Build America Bonds. The offering may also include a series 2010E tax-exempt tranche, but the amount has not been determined.

The bonds (Aa2/AA-/A+) will be sold on a negotiated basis. Loop Capital Markets LLC is the senior manager for the 2010C bonds, and Siebert Brandford Shank & Co. LLC is the lead manager for the 2010D bonds.

Proceeds will be used to construct new schools in the district as well as repair and renovate existing schools.

N.C. transportation deal ahead

Also ahead, the North Carolina Turnpike Authority plans to sell $275 million series 2010 Monroe Connector state appropriation revenue bonds, said a preliminary official statement. That sale is scheduled for Thursday.

The offering includes $250 million in series 2010A Build America Bonds and $25 million in series 2010B tax-exempt bonds.

The bonds (Aa2/AA/) will be sold on a negotiated basis with Bank of America Merrill Lynch as the senior manager.

Proceeds will be used to construct the Monroe Connector, a 19.7-mile roadway extending from U.S. Highway 74 in Mecklenburg County, N.C., at Interstate 485 to Highway 74 in Monroe, N.C.

Michigan to price

In other upcoming offerings, the State of Michigan plans to bring $219.39 million in series 2010 G.O. refunding bonds to market on Tuesday, said a preliminary official statement.

The sale includes $83.825 million in series 2010B G.O. school loan and refunding taxable bonds, $46.45 million in series 2010A G.O. environmental program refunding tax-exempt bonds and $89.115 million in series 2010B G.O. environmental program refunding federally taxable bonds.

The bonds (Aa2/AA-/) will be sold on a negotiated basis with Bank of America Merrill Lynch as the senior manager.

The 2010B school loans bonds are due 2016 to 2020. The 2010A environmental bonds are due 2012 to 2020, and the 2010B environmental bonds are due 2013 to 2015.

Proceeds will be used to fund capital improvements and refund existing debt.

D.C. convention deal set

The week of Oct. 18 is already looking to be a busy week for primary offerings. On Oct. 19, the Washington Convention and Sports Authority in D.C. is set to sell $248.405 million in series 2010 revenue and revenue refunding bonds, said a preliminary official statement.

The sale includes $66.525 million in series 2010A convention center hotel project tax-exempt recovery zone development senior-lien revenue bonds, $110.07 million series 2010B senior-lien dedicated tax revenue bonds and $71.81 million in series 2010C federally taxable bonds. The series 2010B bonds include $90 million in series 2010B-1 federally taxable recovery zone economic development bonds and $20.07 million in series 2010B-2 Build America Bonds.

Goldman, Sachs & Co. is the senior manager for the bonds (A1/A/A+).

Proceeds will be used to construct, acquire, develop and equip the Convention Center Hotel.

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