Muni yields firmer in big day for new issues; University of Texas sells $516.25 million bonds

By Sheri Kasprzak

New York, June 23 - Municipal yields were seen slightly better on Wednesday as retail investors returned to the market, said insiders.

"It's not a great deal better, but we're firming up," said one trader.

"Across the yield curve, I'd say maybe we're down a basis point or so. Retail seems to be interested again, so that's helping us somewhat. Treasuries were a little better, too, so that helps as well."

Over in secondary, the State of Illinois' series 2010-4 Build America Bonds were still attracting plenty of attention Wednesday. The 7.1% 2035 bonds were trading at 6.786%.

Meanwhile, primary continued to dominate the market. The Board of Regents of the University of Texas System led the action with its $516.245 million sale of series 2010D revenue financing system taxable bonds (Aaa/AAA/AAA).

The bonds were sold through Morgan Stanley & Co. Inc. and Barclays Capital Inc., said a term sheet.

The bonds are due 2011 to 2021 with term bonds due 2026, 2030 and 2042. The coupons range from 0.63% to 4.107%, all priced at par. The 2026 bonds have a 4.837% coupon, priced at par. The 2030 bonds have a 5.094% coupon, priced at par, and the 2042 bonds have a 5.134% coupon, also priced at par.

Proceeds will be used to refund a portion of the university's tax-exempt commercial paper notes as well as to finance campus improvements.

The university system is based in Austin.

California sells

In other primary news, the State of California brought $157.705 million in series 2010C veterans general obligation bonds, said a term sheet.

The sale included $83.975 million in series 2010CF non-AMT bonds, $25 million in series 2010CG non-AMT bonds and $48.73 million in series 2010CH AMT bonds.

The bonds (A1) were sold competitively. Citigroup Global Markets Inc. took the series 2010CF and series 2010CH bonds. Goldman, Sachs & Co. won the series 2010CG bonds. The true interest cost for the 2010CF bonds came at 2.788502%, and the TIC for the 2010CG bonds came in at 2.439233%. The TIC for the 2010CH bonds came in at 2.696335%, said Tom Dresslar, spokesman for the state treasurer's office.

The 2010CF bonds are due 2011 to 2017 with coupons and yields from 0.7% to 3.125%. The 2010CG bonds are due 2011 to 2018 with 0.8% to 3.9% coupons and yields. The 2010CH bonds are due 2012 to 2015 with coupons and yields from 1.8% to 3.2%.

Proceeds will be used to purchase residential property for veterans and to refund debt.

Broward brings bonds

Elsewhere, Broward County in Florida sold Wednesday $158.73 million in series 2010 half-cent sales tax revenue bonds, said a pricing sheet.

The bonds (Aa2/AA+/AA+) were sold through senior manager Morgan Stanley.

The offering included $40 million in series 2010A bonds, $69.95 million in series 2010B Build America Bonds and $48.78 million in series 2010C taxable recovery zone economic development bonds.

The 2010A bonds are due 2011 to 2020 with a term bond due 2036. The serial coupons range from 2.5% to 5%. The 2036 bonds have a 5.25% coupon. The full pricing terms for the 2010A bonds were not immediately available.

The 2010B bonds are due 2025 and 2030 with 5.764% and 6.206% coupons, respectively. The bonds priced at par.

The 2010C bonds are due 2040 with a 6.556% coupon, priced at par.

Proceeds will be used to construct, acquire and equip a new 20-story courthouse in Fort Lauderdale, which is the county seat.

Puerto Rico details sale

In other news, the Puerto Rico Sales Tax Financing Corp. released the details Wednesday of its $1.4 billion in series 2010C sales tax first subordinate revenue bonds. The bonds (A1/A+/) priced Tuesday through lead managers Citigroup, Bank of America Merrill Lynch, J.P. Morgan Securities Inc. and Wells Fargo Securities Inc.

The bonds are due 2035 to 2036 and 2038 to 2042 with coupons from 5% to 6.5%.

The offering is part of a $1.572 billion sale that also includes $80 million in series 2010D Build America Bonds and $92 million in series 2010E recovery zone economic development bonds.

Proceeds will be used to redeem existing refunded bonds and repay outstanding obligations.

MTA sets sale

Looking to upcoming sales, the Metropolitan Transportation Authority of New York is expected to price $600 million in series 2010C transportation revenue bonds, said a preliminary official statement.

The sale includes $555 million in series 2010C-1 Build America Bonds and $45 million in series 2010C-2 tax-exempt bonds.

The bonds will be sold on a negotiated basis with Barclays and Loop Capital Markets LLC as the senior managers.

Proceeds will be used to finance transit and commuter projects.

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