Municipal yields close flat, feel firm; Illinois prepares $3.7 billion G.O. sale for Thursday

By Sheri Kasprzak

New York, Feb. 14 - Municipal yields were largely unchanged on Monday, but the market retained a firmer tone, said one trader reached during the day.

"We're seeing some [trading] activity," he said.

"Overall, there's a sense of firmness right now. Yields are relatively flat, but it feels firm."

Meanwhile, primary market volume will be a bit heavier than last week. Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC, said $4.9 billion is expected to come to market.

The bulk of the action will be taken up by Illinois' $3.7 billion of series 2011 taxable general obligation bonds, which are set to come to market on Thursday.

"Certainly, I think it will be something to watch," said one sellsider of the upcoming offering.

"It will be interesting to see the types of buyers. I think there really is a market out there for taxables."

The sellsider said he feels the offering could fuel some interest from investors who would invest in Build America Bonds if the program had not been discontinued - "perhaps some foreign investors."

The state will price the bonds through joint bookrunners Morgan Stanley & Co. Inc., Goldman Sachs & Co. and Loop Capital Markets LLC. The co-senior managers are Mesirow Financial Inc. and William Blair & Co.

The bonds are due 2014 to 2019, and the proceeds will be used to finance the state's school capital needs and retirement system requirements.

Bellevue school bonds ahead

Tuesday looks to be a busy day for the primary market. It will be led by a $200 million offering of series 2011 unlimited tax G.O. bonds (Aaa/AA+/) from the Bellevue School District No. 405 of Bellevue, Wash.

The bonds will be sold competitively with Seattle-Northwest Securities Corp. as the financial adviser.

The bonds are due 2012 and 2015 to 2030.

Proceeds will be used to rebuild three elementary schools, modernize Bellevue High School, modernize the academic portion of Sammamish High School, modernize up to four middle schools and make other capital improvements.

Howard to sell G.O.s

Also on Tuesday's competitive calendar, Howard County of Maryland plans to bring $158.07 million of series 2011 G.O. bonds (Aaa/AAA/AAA).

The offering includes $109.23 million of series 2011A consolidated public improvement bonds and $48.84 million of series 2011A metropolitan district bonds.

Public Financial Management is the financial adviser.

Proceeds will fund capital expenditures.

The county seat is Ellicott City.

Imperial Irrigation sets deal

Also ahead during the week, the Imperial Irrigation District of California is expected to price $80 million of series 2011A electric system refunding revenue bonds Wednesday, said a sales calendar.

The bonds (Aa3/A1/AA+/AA-/) will be sold through Goldman Sachs and Citigroup Global Markets Inc.

The bonds are due 2012 to 2041.

Proceeds will be used to refund the district's series A notes, which were used to finance the El Centro Unit 3 Repower Project.

Based in El Centro, the district diverts water at the Imperial Dam on the Colorado River.

Houston preps sale

Looking out on the horizon, the City of Houston plans to price $280.64 million of series 2011A combined utility system revenue refunding bonds, said a preliminary official statement.

Rice Financial Products Co. is the senior manager for the offering.

The maturities for the bonds (/AA/AA-) have not been set.

Proceeds will be used to refund the city's series 2004C-1, 2004C-2A and 2004C-2B bonds.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.