Primary volume expected to be just over $2 billion ahead of holiday; municipals steady

By Sheri Kasprzak

New York, May 23 - Municipals kicked off the week largely unmoved with little supply and little trading activity to prod the market in any particular direction, despite a rally for the Treasuries market.

"It's just been a quiet day for us," said one trader reached during the session.

"We're holding steady. There's not a lot coming up this week compared to the last few weeks. There are a few things cheapening here and there, but not by a huge amount. I'm going to remain optimistic this week."

Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC, said Monday that a little over $2 billion of scheduled sales are expected in the week ahead with Memorial Day on the horizon.

The week's major offering will come on Tuesday from the Commonwealth of Massachusetts, which plans to come to market with $490 million of series 2011 consolidated general obligation bonds in two tranches.

J.P. Morgan Securities LLC is the lead manager for the deal, which includes $485 million of series 2011B bonds and $5 million of series 2011C Build Massachusetts bonds.

The 2011B bonds are due 2011 to 2025, and the 2011C bonds are due in 2014.

Proceeds will fund capital expenditures included in the current spending plan.

Milwaukee to bring two

In addition to the large sale out of Massachusetts, the City of Milwaukee is poised this week to bring two deals to the table, including a $256.445 million sale of series 2011 G.O. bonds set for pricing Wednesday.

The offering includes $100 million of series 2011-R2 G.O. cash flow promissory notes, $93.625 million of series 2011-N3 G.O. promissory notes, $28.89 million of series 2011-B4 G.O. corporate purpose bonds and $33.93 million of series 2011-T5 G.O. taxable corporate purpose bonds.

The bonds will be sold competitively with Robert W. Baird & Co. as the financial adviser.

The 2011-R2 notes are due Dec. 1, 2011. The 2011-N3 notes are due 2012 to 2021. The 2011B-4 bonds are due 2022 to 2028, and the 2011-T5 bonds are due 2012 to 2028.

Proceeds will be used to fund the city's operating budget on an interim basis in anticipation of shared revenue payments, as well as to finance capital improvements and fiscal requirements.

Additionally, the city will price $53 million of series 2011-S1 sewerage system revenue bonds on a negotiated basis through Cabrera Capital Markets LLC.

Those bonds are due 2012 to 2031, and proceeds will be used to fund capital improvements to the city's sewerage system.

Erie IDA to sell school bonds

Also coming on Wednesday, the Erie County Industrial Development Agency of New York is scheduled to sell $284 million of series 2011 school facilities revenue bonds for the Buffalo City School District.

The deal includes $170 million of series 2011A revenue bonds and $114 million of series 2011B refunding bonds.

Citigroup Global Markets Inc. is the senior manager for the bonds (Aa3/AA-/), the proceeds of which will fund improvements and repairs to Buffalo schools, as well as refund the agency's series 2003 bonds.

The 2011A bonds are due 2013 to 2032, and the 2011B bonds are due 2012 to 2024.

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