Yields little moved as they fail to impress retail; New York State brings $832.88 million

By Sheri Kasprzak

New York, March 22 - Munis were off just slightly on Tuesday with little to move the market in any direction, said traders.

"Retail is absent," said one trader. "We're probably a basis point or so off in the middle [of the yield curve], but there's so little going on that the market has no real direction."

Retail investors, said the trader, have not been impressed by current yields. In fact, the New York City Municipal Water Finance Authority switched back to a two-day retail order period after attempting to price the bonds for retail on Monday and institutional investors on Tuesday. Instead, the authority priced its $400 million of series 2011GG water and sewer second general resolution revenue bonds for retail again on Tuesday and intends to price for institutional investors on Wednesday, said the trader, who was familiar with the deal.

"Yields are just not good," he said of the offering. "There wasn't enough [retail] interest on Monday to justify going ahead [with institutional]."

Michigan talks legislation

Meanwhile, the State of Michigan is looking for ways to save its municipalities from Chapter 9 bankruptcy, said Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC.

Kozlik said Tuesday that newly minted Michigan Gov. Rick Snyder has proposed legislation that could replace city and county structured governments with metropolitan authorities.

The idea, Kozlik said, would be to offer service sharing and efficiency.

Moody's Investors Service agreed that the legislation is a positive for the troubled state.

"This change in legislation is a credit positive for financial distressed municipalities in Michigan, as it provides them with broad technical assistance sooner, and permits sweeping organizational and financial changes that, in some instances, may be necessary to avoid Chapter 9 bankruptcy," said a Moody's report on the state's plans.

New York brings G.O. bonds

Heading up Tuesday's primary action, the State of New York came to market with $832.875 million of series 2011 general obligation bonds in four tranches, said pricing sheets.

The sale included $481.185 million of series 2011A tax-exempt bonds, $21.865 million of series 2011B taxable bonds, $231.9 million of series 2011C tax-exempt refunding bonds and $97.925 million of series 2011D taxable refunding bonds.

The 2011A bonds are due 2012 to 2037 with a term bond due in 2041. The serial coupons range from 3% to 5.25%. The 2041 bonds have a 5% coupon priced at 101.554.

The 2011B bonds are due 2012 to 2021 with coupons from 1% to 4.05%, all priced at par.

The 2011C bonds are due 2011 to 2020 with 3% to 5% coupons.

The 2011D bonds are due 2011 to 2022 with 0.3% to 4.1% coupons, all priced at par.

The bonds were sold competitively. Wells Fargo Securities LLC won the 2011A, 2011B and 2011D bonds, and Merrill Lynch took the 2011C bonds.

Proceeds will be used to finance environmental initiatives, capital expenditures and refund debt.

Central Bucks prices

Also in the competitive market, the Central Bucks School District of Pennsylvania sold $120.67 million of series 2011 G.O. bonds Tuesday, said a term sheet.

The bonds (Aa1) were sold competitively. Robert W. Baird & Co. was the winning bidder with a 3.674001% true interest cost.

The sale included $49.24 million of series 2011A bonds and $71.43 million of series 2011B bonds.

The 2011A bonds are due 2012 to 2026 with 3% to 5% coupons. The 2011B bonds are due 2012 to 2029 with coupons from 2% to 5%.

Proceeds will be used to refund the district's series 2003, 2007 and 2008 bonds.

The school district is based in Doylestown, Pa.

Massachusetts sale ahead

Coming up on Wednesday, the Commonwealth of Massachusetts is poised to bring $438.525 million of series 2011 G.O. bonds through Siebert Brandford Shank & Co. LLC.

The offering includes $78.525 million of series 2011B G.O. bonds and $360 million of series 2011A consolidated loan G.O. bonds.

The 2011B bonds are due 2012 to 2021, and the 2011A bonds are due 2022 to 2029.

Proceeds will be used to reimburse the commonwealth for capital expenditures.

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