Muni yields close out week mostly weaker; Lower Colorado River Authority sells $373.67 million

By Sheri Kasprzak

New York, Oct. 22 - Municipal yields closed out the week flat to slightly weaker, especially in the middle of the yield curve, in what traders characterized as a quiet day.

"There's not a lot going on," said one trader.

"We're pretty much following the same pattern we have all week. It's slow and we're mostly flat. There's some weakness in the middle of the curve, outside of 10 years."

Another trader said trading action picked up somewhat during the week but faded by Friday.

In primary action, the Lower Colorado River Authority of Austin, Texas, sold $373.67 million in series 2010 refunding revenue bonds, said a pricing sheet.

The sale included $244.135 million in series 2010A bonds and $129.535 million in series 2010B bonds.

The bonds (A1/A/A+) were sold through Goldman, Sachs & Co. The co-lead managers were Barclays Capital Inc., Bank of America Merrill Lynch and Morgan Stanley & Co. Inc.

The 2010A bonds are due 2012 to 2030 with term bonds due 2035 and 2040. The serial coupons range from 2% to 5%. The 2035 bonds have a 5% coupon priced at 108.309. The 2040 bonds have a 5% coupon priced at 108.464.

The 2010B bonds are due 2011 to 2024 with 2% to 5% coupons.

Proceeds will be used to refund the authority's series A commercial paper notes and refund its parity debt as well as make a deposit to a debt service reserve fund.

Connecticut bonds ahead

Looking to the coming week's offering, the State of Connecticut is scheduled to bring to market $700 million in series 2010 transportation infrastructure special tax obligation bonds on Tuesday, said a sales calendar.

The deal includes $200 million in series 2010A bonds, $400 million in series 2010B Build America Bonds and $100 million in series 2010C refunding bonds.

Citigroup Global Markets Inc. is the senior manager with Goldman Sachs, Siebert Brandford Shank & Co. LLC, Bank of America Merrill Lynch and Jackson Securities as the co-senior managers.

The 2010A bonds are due 2011 to 2018, and the 2010B bonds are due 2019 to 2030. The 2010C bonds are due 2012 to 2021.

The state plans to use the proceeds to refund its series 2001A, 2002A and 2002B bonds and finance capital improvements to the state's transportation infrastructure.

San Antonio deal set

Also ahead, the City of San Antonio, Texas, plans to price $500 million in series 2010 electric and gas systems junior-lien revenue bonds (Aa1/AA/AA+) on Thursday, said a preliminary official statement.

The sale includes $300 million in series 2010A Build America Bonds and $200 million in series 2010B refunding Build America Bonds.

The 2010A bonds are due 2041, and the 2010B bonds are due 2037.

J.P. Morgan Securities LLC is the senior manager for the 2010A bonds, and Bank of America Merrill Lynch is the lead manager for the 2010B bonds.

Proceeds will be used to construct capital improvements to the city's gas and electric systems and to refund existing commercial paper notes.

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