Municipals hold steady even as Treasuries slide; Denver brings $349.73 million airport bonds

By Sheri Kasprzak

New York, April 7 - Municipals rounded out Thursday mostly unmoved despite some anxiety in the Treasuries market about the latest earthquake in Japan, market insiders said. Trading remained quiet, with yields only slightly softer in the middle of the curve.

"There's a bit of a sag in the middle," said one trader when asked about the tone of the market Thursday afternoon.

"Everywhere else is pretty flat. There's not a lot of trading going on. Treasuries are kind of haywire because of that earthquake, but it doesn't seem to be affecting us."

Primary action was reasonably light on Thursday, led by an airport deal out of the City and County of Denver and a variable-rate offering from the Pennsylvania Turnpike Commission.

Denver flies deal

Heading up the action, Denver came to market with $349.73 million of series 2011A AMT airport system revenue bonds through Citigroup Global Markets Inc., said a pricing sheet.

The bonds (A1/A+/A+) are due 2012 to 2023 with 3% to 5.75% coupons.

Proceeds will be used to refund all of the airport system's series 2008A-3 revenue bonds, all of its series 2008A-4 revenue bonds and all or a portion of its series 2000A revenue refunding bonds.

Pennsylvania deal sells

Elsewhere, the Pennsylvania Turnpike Commission priced Thursday $92.035 million of series 2011B variable-rate turnpike revenue bonds, said a pricing sheet.

The bonds were sold through RBC Capital Markets LLC.

The bonds are due 2012 to 2015 and bear interest at the weekly rate.

Moody's Investors Service rates the 2012 maturity MIG 1 and the rest of the maturities Aa3. Standard & Poor's and Fitch rate the bonds A+.

Proceeds will be used to refund the commission's outstanding series 2001S bonds.

North Texas deal ahead

Looking to the coming week, the North Texas Tollway Authority plans to drive $1.029 billion of series 2011 revenue bonds and taxable bond anticipation notes to market on April 14, said a sales calendar. The offering will be the first significant offering to price in many months. One trader said Thursday that the offering might lure in some buyers that have been put off by the tax-exempt market in recent months.

"Retail seems to be backing away from tax-exempts, but this features some taxable notes," he said.

"This will probably draw in some different investors. Those who are interested in taxable notes are a different buyer from those who might look into tax-exempts. It should be interesting."

The offering includes $606.467 million of series 2011 special projects revenue bonds and $422.315 million of series 2011 taxable bond anticipation notes.

The deal will be brought to market through senior manager Citigroup.

Proceeds will be used to make an upfront payment to the Texas Department of Transportation for the authority's right to own and operate an 11.5 mile toll stretch of State Highway 161 in western Dallas County extending from State Highway 183 to Interstate 20.

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