Muni yields improve slightly; Illinois sells $1.3 billion G.O. certificates; King County sells

By Sheri Kasprzak

New York, July 20 - Municipal yields were slightly better on Tuesday as a few larger offerings priced, market insiders said.

The shorter bonds seemed to be the most improved, said the trader. Munis in general were seen firmer.

"Inside of 10 years, yields are probably down by 1 or 2 basis points," said the trader. "Everything else is unchanged."

Meanwhile in primary, the State of Illinois brought $1.3 billion in series July 2010 general obligation certificates, said a pricing sheet.

The certificates (/SP-1/) were sold competitively with Bank of America Merrill Lynch as the winner. Public Resources Advisory Group was the financial adviser.

"It's really hard to say," said one sellsider when asked if the state got better pricing by selling competitively.

"I think they did pretty well for Illinois. They didn't have to downsize, and they've had to cut before, so at least there was some interest there."

The offering was split into three tranches, including $500 million in certificates due April 15, 2011, $400 million in certificates due May 20, 2011 and $400 million in certificates due June 14, 2011.

The April 2011 certificates have a 3% coupon priced at 100.792 to yield 1.875%. The May 2011 certificates have a 3% coupon priced at 100.798 to yield 2%, and the June 2011 certificates have a 3% coupon priced at 100.753 to yield 2.125%.

Proceeds will be used to make payments on fiscal year 2010 obligations from a revenue shortfall versus budgeted amounts in the year.

King sells $336.04 million

In other primary action, King County in Washington sold Tuesday $336.035 million in series 2010 sewer revenue and refunding bonds, said a pricing sheet.

The bonds (/AA+/) were sold competitively with Bank of America Merrill Lynch winning the bid, said Nigel Lewis of the county's finance department. The true interest cost came in at 4.45%.

The bonds are due 2011 to 2032 with term bonds due 2036, 2040, 2045 and 2050.

The serials have coupons from 2% to 5%. The 2036 bonds have a 4.25% coupon priced at 98, the 2040 bonds have a 5% coupon priced at 104.369, and the 2045 bonds have a 5% coupon priced at 103.962. The 2050 bonds have a 5% coupon priced at 103.557.

Proceeds will be used to finance improvements to the county's sewer system as well as to refund the county's existing sewer revenue bonds.

The county seat is Seattle.

Massachusetts port deal ahead

Coming up, the Massachusetts Port Authority is expected to price $322.415 million in revenue and refunding bonds, according to a preliminary official statement. Pricing is expected on July 27.

The offering is comprised of $97.09 million in series 2010A non-AMT revenue bonds (Aa3), $139.97 million in series 2010B non-AMT revenue refunding bonds (Aa3), $25.03 million in series 2010C AMT revenue refunding bonds (Aa3) and $60.325 million in series 2010E PFC revenue refunding bonds (A2).

Siebert Brandford Shank & Co. LLC and J.P. Morgan Securities Inc. are the senior managers.

Proceeds will be used to finance projects, including a bus maintenance facility, improvements to terminals, a new parking deck and upgrades to the Black Falcon Cruise Terminal. The remainder will be used to refund the authority's series 1998A, 1998D and 2008B bonds.

Based in Boston, the authority operates the airports and seaports in eastern and central Massachusetts.

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