Municipals end week flat to slightly softer; Miami-Dade schools sell $276 million COPs

By Sheri Kasprzak

New York, March 11 - Municipals were mostly unchanged on Friday with a touch of weakness on the long end of the yield curve, market insiders reported.

The week's supply did little to give the market, particularly lower-grade bonds, a real sense of direction, traders noted. The week ahead will offer even less in the way of new issue supply.

"We're looking flat for the most part," said one trader. "There's not a lot going on in secondary - maybe off by a basis point on the long end, out past 30 years."

Meanwhile, the question of what happens once municipal supply picks up has been on the minds of market insiders.

"Muni bond yields have slipped modestly as the market monitors how new issues are received," said J.R. Rieger, vice president of fixed income indices at Standard & Poor's, on Friday. "So far, so good. The question is what happens when the supply opens back up?"'

Rieger said nominal yields on investment-grade tax-exempt munis are about where investment-grade corporates are.

Looking at yield from a taxable equivalent yield perspective shows that tax-exempt municipal bonds are 200 plus basis points cheaper than investment-grade corporate bonds.

Miami-Dade bonds price

In light primary action Friday, the Miami-Dade County School Board of Florida priced $276.715 million of series 2011 certificates of participation, according to a pricing sheet.

The COPs (A1) were sold through Citigroup Global Markets Inc.

The offering included $139.055 million of series 2011A COPs and $137.66 million of series 2011B COPs.

The 2011A certificates are due 2012 to 2013 and 2016 to 2021 with a term bond due in 2031. The serial coupons range from 2.5% to 5%. The 2031 bonds have a 5% coupon and were not reoffered.

The 2011B certificates are due 2031 to 2032 with 5% to 5.75% coupons.

Proceeds will be used to refund the school board's series 2007A-C and series 2009 COPs.

Connecticut preps deal

Heading up the coming week's new issues, the State of Connecticut plans to offer $200 million of series 2011A state revolving fund general revenue bonds through Ramirez & Co. Inc.

The bonds are due 2012 to 2031.

Proceeds will be used to fund loans and reimburse the state for previously advanced loans.

Hancock County plans sale

Elsewhere, Hancock County in Ohio announced plans to sell $108.675 million of series 2011A hospital facilities revenue bonds for the Blanchard Valley Regional Health Center, according to a preliminary official statement.

The bonds (A3/A-/) will be sold on a negotiated basis with Bank of America Merrill Lynch as the senior manager.

Proceeds will be used to refund the health center's series 2004 bonds.

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