Muni market firmer ahead of issuance that could top $6 billion; Colorado sells education TRANs

By Sheri Kasprzak

New York, July 11 - Municipals rounded out Monday on a firmer note ahead of a large wave of new offerings, said market insiders.

One trader said during the session that the secondary market perked up after several weeks of disappointing activity.

"Finally, we're seeing some bites," he said of secondary action.

"There's a lot coming up [in primary]. The supply seems to be driving the market. We think it will be well digested. There's a good deal of demand out there."

Yields were seen better by 1 basis point to 3 bps across the curve with 10-year bonds seeing the most improvement, the trader said. Thirty-year yields closed out the day largely unchanged.

Heading up Monday's light primary calendar, the State of Colorado brought $100 million of series 2011A education loan program tax and revenue anticipation notes, said a pricing sheet.

The notes (MIG 1/SP-1+/) were sold competitively. Calls to the state treasurer's office for the winning bidder were not returned by press time Monday evening.

The notes are due June 29, 2012 and have a 2% coupon. They priced at 101.693.

Proceeds will be used to provide loans to educational facilities ahead of their collection of property taxes and other funds for the coming fiscal year.

Monday's offering precedes a $500 million sale of series 2011A general fund TRANs (MIG 1/SP-1+/) from the state, which is expected to price Tuesday.

That deal will also be sold competitively with Stifel, Nicolaus & Co. Inc. as the financial adviser.

The notes are due June 27, 2012, and proceeds will finance general fund requirements through the coming fiscal year ahead of tax and revenue collections.

Volume could top $6 billion

New issuance volume could top $6 billion during the week ahead, said Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC.

The week's deals will be led by a $762.715 million sale of series 2011 state personal income tax revenue bonds from the Dormitory Authority of the State of New York. The offering is comprised of $717.945 million of series 2011C tax-exempt bonds and $44.77 million of series 2011D taxable bonds.

Wells Fargo Securities LLC and Barclays Capital Inc. are the lead managers for the bonds (/AAA/AA).

Proceeds will fund capital projects at the State University of New York and grants under the Expanding Our Children's Education and Learning program. Pricing for the deal is set for Wednesday.

Michigan building deal ahead

Another major deal set for the coming week comes from the State Building Authority of Michigan, which is poised to bring $646.425 million of series 2011 revenue and revenue refunding bonds (Aa3/A+/) in four tranches through J.P. Morgan Securities LLC and Citigroup Global Markets Inc.

The authority intends to use the proceeds from the sale to upgrade state buildings, including energy conservation measures, roof replacements and repairs, fire system improvements and upgrades, HVAC upgrades and window replacements.

Tampa Bay deal set

Looking ahead, the Tampa Bay Water Authority of Florida is expected to come to market with $292.815 million of series 2011 utility system refunding revenue bonds, said a preliminary official statement.

The deal includes $142.39 million of series 2011A bonds and $150.425 million of series 2011B bonds.

The bonds (Aa2/AA+/AA+) will be sold on a negotiated basis with Citigroup as the senior manager for the 2011A bonds and Raymond James & Associates Inc. as the lead manager for the 2011B bonds.

The co-senior managers for the 2011A bonds are Bank of America Merrill Lynch, Morgan Stanley & Co. Inc. and Raymond James. The co-senior managers for the 2011B bonds are Bank of America Merrill Lynch, Citigroup and Morgan Stanley.

The bonds are due 2011 to 2024.

Proceeds will be used to refund the authority's outstanding series 2001A-B revenue bonds.

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