Munis closed mixed as Treasuries dive on improved stocks; Indianapolis Light & Power prices

By Sheri Kasprzak

New York, Aug. 24 - Municipals were somewhat mixed on Wednesday as Treasuries took a hit following a jump in stocks, said market insiders.

Short bonds were softer while longer bonds ended slightly firmer. Thirty-year yields, however, were up almost 5 basis points. Two-year yields were up 4 bps, and five-year yields were up 2 bps. Twenty-year yields were down nearly 7 bps.

"We seem to be following Treasuries, but there's enough buying going on out there to keep us from collapsing as much [as Treasuries]," said one trader.

Ten-year Treasury yields were up 14 bps.

Indiana power deal prices

Heading up the light primary action on Wednesday, the Indiana Finance Authority priced $95 million of series 2011 environmental facilities revenue bonds for the Indianapolis Power & Light Co., said a pricing sheet.

The offering included $55 million of series 2011A non-AMT bonds and $40 million of series 2011B non-AMT bonds.

Both bonds (A3/BBB/BBB+) are due Aug. 1, 2021, have a 3.875% coupon and priced at par.

J.P. Morgan Securities LLC was the lead manager for the deal.

Proceeds will be used to construct, equip and install pollution control facilities, solid waste disposal facilities and industrial development projects at Unit 4 of the generating station in Petersburg, Ind., owned by Indianapolis Power & Light.

Clean Water bonds sold

In other new deals, Clean Water Services of Oregon came to market Wednesday with $80.255 million of series 2011 senior-lien sewer revenue bonds, said a pricing sheet.

The offering included $30.255 million of series 2011A refunding bonds and $50 million of series 2011B revenue bonds.

The 2011A bonds are due 2012 to 2021 with 2% to 5% coupons. The 2011B bonds are due 2013 to 2030 with a term bond due in 2032. The serial coupons range from 2.5% to 5%. The 2032 bonds have a 4% coupon and priced at 99.012.

The bonds (Aa2/AA/) were sold competitively. Calls to the issuer for the winning bidder were not returned Wednesday.

Proceeds will be used to fund improvements to the agency's sewer system and to fund a debt service reserve.

Metro Transit to price

Looking to upcoming offerings, the Metropolitan Transit Authority of Harris County, Texas, plans to price $510.56 million of series 2011 sales and use tax bonds, said a preliminary official statement.

The offering includes $462.98 million of series 2011A sales and use tax bonds and $47.58 million of series 2011B sales and use tax contractual obligations.

The bonds (Aa2/AA/) will be sold on a negotiated basis with Goldman Sachs & Co. as the senior manager.

Proceeds will be used to fund the costs of two light rail lines as part of the authority's MetroRail light rail system, to purchase 100 hybrid electric transit buses and to refund existing commercial paper notes.

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