Municipals end mostly firmer as supply increases; Harford County, Md., brings $64.58 million

By Sheri Kasprzak

New York, Jan. 10 - Municipal yields were largely firmer on Tuesday as the week's primary activity began to take off. Yields on 20-year bonds were down more than 8 basis points, said one trader reached during the afternoon.

"Supply is starting to pick up and demand is still good, so yields are still firm," said the trader.

Indeed, supply is starting to build, said Alan Schankel, managing director with Janney Montgomery Scott LLC, but it remains fairly low compared with 2011's levels.

"The 30-day visible supply is beginning to build, but at $7.4 billion, it remains manageable," Schankel wrote in a report released Tuesday.

Harford County sells G.O.s

In primary activity, Harford County, Md., sold $64.58 million of series 2012 general obligation bonds competitively.

The deal included $55 million of series 2012A G.O. bonds and $9.58 million of series 2012B G.O. refunding bonds.

The 2012A bonds were won by Robert W. Baird & Co. Inc. with a 2.595842% true interest cost, and Janney Montgomery Scott LLC won the 2012B bonds with a 1.616081% TIC, said Kathryn Hewitt, the county's treasurer in an interview on Tuesday.

There were 11 bidders for the 2012A bonds and nine bidders for the 2012B bonds, Hewitt said.

"The sale was very competitive with a very close cover on the winning bid," Hewitt said.

Hewitt noted that the county conducts all of its G.O. bond sales on a competitive basis.

The 2012A bonds are due 2013 to 2032 with 2% to 5% coupons. The 2012B bonds are due 2013 to 2024 with 2% to 4% coupons.

Proceeds will be used to fund improvements to the county's water and sewer system, as well as to refund the county's series 2004 consolidated improvement bonds.

N.C. Garvees' structure

In upcoming deals, the State of North Carolina is prepared to come to market on Wednesday with $181,335,000 of series 2012 grant anticipation vehicle revenue bonds (Aa2/AA/AA-) through Bank of America Merrill Lynch.

Julia Vail, spokeswoman for the state treasurer's office, told Prospect News on Tuesday that the bonds differ quite a bit from the state's $156 million sale of Garvees conducted in December.

"Market conditions remain favorable, but this schedule has been in place since November," Vail said when asked about the offering's timing so close to the previous sale.

"This Garvee issuance was not combined with the previous sale due to the very different structures of the two."

The bonds being sold on Wednesday have serial maturities due 2013 to 2019. The bonds sold in December are due March 1, 2023.

Proceeds from Wednesday's sale will be used to widen, replace and relocate a series of highways and interstates within the state.

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