Yields drop as primary deals come to market; Cape Coral, Fla., brings $175 million of bonds

By Sheri Kasprzak

New York, Sept. 8 - A new flood of offerings helped boost the muni market on Thursday, with yields seen better by 2 basis points to 5 bps across the yield curve, market insiders reported.

"There seems to be new interest [in the muni market]. We're getting a lot of retail investors back," one trader noted.

A new supply of offerings could be pulling in investors lost during the volatile market conditions of weeks past.

The slate of deals Thursday was led by $175 million of series 2011 water and sewer refunding revenue bonds from the City of Cape Coral, Fla.

The city sold the bonds (Aa3/A1/AA+/A-/) through Morgan Stanley & Co. LLC.

The bonds are due 2012 to 2026 with term bonds due in 2031 and 2041. The serial coupons range from 2% to 5%. The 2031 bonds have a 4.75% coupon and priced at par. The 2041 bonds have a 5% coupon and priced at 100.547.

Proceeds will be used to refund existing debt and refinance commercial paper notes.

New York mortgage bonds price

Elsewhere during the session, the New York State Mortgage Agency sold $151.215 million of homeowner mortgage revenue bonds, said a pricing sheet.

The bonds were sold through Morgan Stanley.

The offering included $66.825 million of series 163 non-AMT bonds and $84.39 million of series 164 non-AMT bonds.

The series 163 bonds are due 2016 to 2022 with term bonds due in 2026, 2031 and 2036. The serial coupons range from 1.85% to 3.4%. The coupon is 4% for the 2026 bonds, 4.45% for the 2031 bonds and 4.6% for the 2036 bonds. All of the bonds priced at par.

The series 164 bonds are due 2013 to 2017 and 2021 to 2022 with 0.6% to 3.4% coupons. They all priced at par.

Proceeds will be used to make mortgage loans to qualified New York state residents.

Puerto Rico GDB bonds ahead

Looking to upcoming offerings, the Government Development Bank of Puerto Rico announced plans Thursday to offer $450 million of series 2011C senior notes.

The notes (Baa1/BBB/) will be sold on a negotiated basis with Citigroup Global Markets Inc. as the underwriter, said a preliminary official statement.

The notes are due in 2012.

Proceeds will be used to manage cash-flow needs during fiscal year 2012.

Sacramento MUD deal planned

In other upcoming deals, the Sacramento Municipal Utility District of California plans to price $348.125 million of series 2011X electric revenue refunding bonds, said a preliminary official statement.

The bonds (A1/A+/A+) will be sold on a negotiated basis with J.P. Morgan Securities LLC and Barclays Capital Inc. as the lead managers.

The bonds are due 2012 to 2028.

Proceeds will be used to refund the district's series 2001N, 2001O, 2001P, 2001Q, 2001R and 2001T revenue bonds.

Hawaii to sell debt

Also ahead, the State of Hawaii is expected to bring $297.855 million of series 2011 AMT airport system revenue refunding bonds, said a preliminary official statement.

The bonds will be sold through Bank of America Merrill Lynch and Piper Jaffray & Co.

The bonds are due 2012 to 2024.

Proceeds will be used to refund the state's series 2001 airport system revenue refunding bonds.

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