Municipals mixed as new offerings price; Port Authority sells $400 million, Nevada prices

By Sheri Kasprzak

New York, Oct. 26 - Municipal yields were mixed to end the session Wednesday as a new slate of offerings came to market. One trader noted that secondary activity was less than stellar. Despite a solid reception for new offerings, the middle of the yield curve closed out the day slightly softer.

Thirty-year yields, on the other hand, ended the session very strong, down 10 bps. Five-year yields were up nearly 3 bps and 20-year yields were up 2 bps.

Meanwhile, municipal-to-Treasury ratios continue to rise after a week of declines, reported Alan Schankel, managing director with Janney Montgomery Scott LLC.

"A 2.42% yield in 10 years generated a 115% ratio, while a 3.13% yield pushed the 30-year ratio to 119%," Schankel wrote in a report released Wednesday.

Schankel also noted that the heavy slate of new issues is getting generally good reception with some recent offerings oversubscribing.

Port Authority's $400 million

Heading up the day's primary action, the Port Authority of New York and New Jersey came to market with $400 million of 169th series consolidated bonds, said a pricing sheet.

The bonds (Aa2/AA-/AA-) were sold competitively with J.P. Morgan Securities LLC winning the bid.

The bonds are due 2012 to 2028 and 2030 to 2034 with term bonds due in 2036 and 2041. The serial coupons range from 3% to 5%. The 2036 bonds have a 5% coupon priced at 105.131 and the 2041 bonds have a 5% coupon priced at 103.968.

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

Nevada sells G.O.s

In other pricing action, the State of Nevada sold $149.435 million of series 2011 limited tax general obligation bonds in six tranches, said a pricing sheet.

The offering included $65.245 million of series 2011A capital improvement, cultural affairs and refunding bonds; $5.545 million of series 2011B Colorado River Commission Hoover Uprating refunding bonds; $28.46 million of series 2011C water pollution control revolving fund leveraged refunding bonds; $32.835 million of series 2011D open space, parks and cultural resources refunding bonds; $14.53 million of series 2011E open space, parks and cultural resources refunding bonds; and $2.82 million of series 2011F safe drinking water revolving fund matching bonds.

The 2011A bonds are due 2015 to 2030 with 4% to 5% coupons. The 2011B bonds are due Oct. 1, 2017, and have a 5% coupon priced at 115.171. The 2011C bonds are due 2012 to 2020 with 2% to 5% coupons and the 2011D bonds are due 2014 to 2021 with 4% to 5% coupons. The 2011E bonds are due 2014 to 2021 with coupons from 3% to 5%. The 2011F bonds are due 2012 to 2015 with 2% to 4% coupons.

The bonds (Aa2/AA/AA+) were sold through Morgan Stanley & Co. LLC.

Proceeds will be used to fund capital improvement and cultural affairs projects, refund G.O. and revenue debt and provide state matching funds for the state's safe drinking water revolving fund program.

California Health prices bonds

Also during the session, the California Health Facilities Financing Authority priced $106.735 million of series 2011A revenue bonds for the Children's Hospital of Orange County, said a pricing sheet.

The bonds (/A/A) are due 2015 to 2026 with term bonds due in 2031, 2035 and 2041. The serial coupons range from 3% to 5%. The 2031 bonds have a 5% coupon priced at 97.531 and the 2035 bonds have a 5.25% coupon priced at 98.657. The 2041 bonds have a 5.25% coupon priced at 97.783.

Morgan Stanley & Co. LLC was the sole underwriter for the offering.

Proceeds will be used to finance capital projects for the hospital.

Chicago preps bond deal

Looking to upcoming sales, the City of Chicago is set to price $237.895 million of series 2011 sales tax revenue bonds, said a preliminary official statement.

The offering includes $219.39 million of series 2011A sales tax revenue bonds and $18.595 million of series 2011B taxable bonds.

The bonds (Aa2/AAA/AA-) will be sold on a negotiated basis with Loop Capital Markets LLC as the senior manager.

Proceeds will be used to refund existing debt.

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