Munis close a bit firmer even as Treasuries weaken; Florida Board of Education sells PECO bonds

By Sheri Kasprzak

New York, Nov. 8 - Municipals ended the session a bit firmer on Tuesday even though Treasuries were weaker on news that Italian prime minister Silvio Berlusconi will be resigning.

Municipals did slide along with Treasuries earlier in the session, said one trader, but they were able to rebound slightly at the close of market.

"We're firmer, but not by much," said one trader.

"For a lot of the day, we were moving with Treasuries, but we seem to have made a turnaround."

Short bonds saw the most improvement. Two-year and five-year yields were both seen better by almost 2 basis points. The rest of the market was only slightly firmer to unchanged.

In contrast, five-year Treasury yields were seen up nearly 3 bps. Ten- and 30-year Treasury yields were both up nearly 5 bps by the end of the session.

The primary market was fairly busy on Tuesday, with several competitive offerings hitting the market. The day's action was led by the Florida Board of Education's $164.45 million sale of series 2011E public education capital outlay refunding, said a pricing sheet.

The bonds (Aa1/AAA/) were sold competitively with Bank of America Merrill Lynch as the winning bidder.

The bonds are due 2022 to 2032 with coupons from 4% to 5%.

Proceeds will be used to refund the state board of education's series 2000B-C and 2001G PECO bonds.

Clark County brings bonds

In another competitive deal, Clark County in Nevada priced $118.105 million of series 2011 motor vehicle fuel tax revenue bonds, said a pricing sheet.

The bonds (Aa3) were sold competitively with J.P. Morgan Securities LLC winning the bid.

The bonds are due 2012 to 2023 with 4% to 5% coupons.

Proceeds will be used to refund some maturities of the county's series 2003 highway revenue improvement and refunding bonds.

West Contra Costa USD prices

Over in the negotiated market, the West Contra Costa Unified School District of California came to market with $100 million of election of 2010 general obligation bonds, said a pricing sheet.

The bonds (Aa3//AA+) were sold on a negotiated basis with Piper Jaffray & Co. as the senior manager.

The offering included $79 million of tax-exempt bonds and $21 million of taxable qualified school construction bonds.

The tax-exempt are due 2012 to 2013 and 2020 to 2027 with term bonds due in 2032, 2035 and 2041. The serial coupons range from 3% to 5%. The 2032 bonds have a 5.25% coupon and priced at 104.235, and the 2035 bonds have a 5.25% coupon but were not reoffered. The 2041 bonds have a split maturity with a 5% coupon priced at 98.924 and a 5.25% coupon priced at 102.667.

The taxable bonds are due in 2030 and have a 6.25% coupon. They priced at par.

Proceeds will be used to renovate and construct schools within the district.

North Texas deal planned

Looking ahead, the North Texas Tollway Authority plans to sell $266.28 million of series 2011B system first tier revenue refunding bonds, said a preliminary official statement.

The bonds (A2/A-/) will be sold on a negotiated basis with Siebert Brandford Shank & Co. LLC as the senior manager. The co-managers are Morgan Stanley & Co. LLC, Estrada Hinojosa & Co. Inc. and First Southwest Co.

The bonds are due 2019 to 2026 with a term bond due in 2038.

Proceeds will be used to refund the authority's series 1997A, 1998, 2003A and 2008E-2 revenue bonds.

News of the new offering comes just days after the authority wrapped up pricing on its $640.535 million sale of series 2011 special projects system revenue bonds through JPMorgan.

The bonds (/AA/AA-) priced on Thursday and included $566.87 million of series 2011D tax-exempt bonds and $73.665 million of series 2011E taxable bonds.

The 2011D bonds are due 2019 to 2032 with 5% to 5.25% coupons. The 2011E bonds are due 2019 to 2023 with 3.269% to 3.869% coupons, all priced at par.

Proceeds from that sale will be used to fund the construction and development of the Chisholm Trail Parkway in Fort Worth and Cleburne.

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