Muni yields close flat to firmer; Chicago brings $299.34 million; San Francisco Airport prices

By Sheri Kasprzak

New York, Jan. 20 - Municipals were flat to better on Thursday as investors returned to the marketplace seeking yield, said market insiders.

"There are some investors who are really excited to see [long] yields over 5%," a trader said.

"It's a great environment now for investors who are comfortable with the [municipals] market. Thankfully there are enough of those that it seems to be making a bit of a difference today."

The trader noted that yields on the long end were improved by 2 to 3 basis points while the rest of the market held steady.

Alan Schankel, managing director with Janney Montgomery Scott LLC, said that the pace of outflows from mutual funds has slowed.

"Anecdotal information indicates that mutual funds are still net sellers but are becoming more selective, implying that the pace of outflows has slowed," Schankel wrote in a report released Thursday.

According to Schankel, the week's largest deal, a $450 million sale from the New York City Municipal Water Financing Authority, was repriced Thursday to 5.54% from 5.6% in the 2043 maturity based on strong demand.

Chicago sells G.O. bonds

Meanwhile, the primary market was more active than in the past few days, with Chicago leading the action.

The city sold $299.34 million of series 2011C-1 taxable project general obligation bonds through Loop Capital Markets LLC.

The bonds are due Jan. 1, 2035 and have a 7.781% coupon priced at par.

Proceeds will be used to make public right-of-way infrastructure improvements in city neighborhoods, including alley and street construction, lighting improvements and sidewalk reconstruction, street resurfacing, bridge rehabilitation and traffic signal installation.

San Francisco deal flies

Also during the session, the San Francisco Airport Commission sold $155.75 million of series 2011 refunding revenue bonds, said a pricing sheet.

The bonds were sold through Siebert Brandford Shank & Co. LLC.

The offering included $88.4 million of series 2011A bonds and $67.35 million of series 2011B bonds.

The 2011A bonds are due 2012 to 2019 with 4% to 5.75% coupons. The 2011B bonds are due 2012 to 2021 with 4% to 5.5% coupons.

Proceeds will be used to refund existing debt.

Albuquerque brings bonds

Elsewhere, the City of Albuquerque sold $135 million of series 2011A G.O. general purpose bonds (//AA+) competitively, said a pricing sheet.

The bonds are due 2011 to 2023 with 3% to 4.375% coupons.

Proceeds will be used to finance general capital projects throughout the city.

PANYNJ deal ahead

Looking to upcoming sales, the Port Authority of New York and New Jersey is scheduled to bring to market $300 million of 166th series consolidated bonds on Jan. 27, said a notice of sale.

The bonds will be sold competitively and are due 2030 to 2041.

Proceeds will be used to fund capital projects for the authority and to refund existing debt.

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