Municipal bonds trade in 6 bps on long end; Washington to sell $1.49 billion in four tranches

By Cristal Cody

Prospect News, Jan. 25 - Municipal bonds traded better on Wednesday following the Federal Reserve's Federal Open Market Committee statement that indicated rates will be kept low through 2014.

Benchmark bonds were in as much as 6 basis points in long maturities, a source said.

"The muni market did well today as did the entire bond market, mostly because of the FOMC communication," a source said. "Munis slugged along with Treasuries and had a good day. There's not a whole lot of supply that created a headwind to hold them back."

Primary activity stayed light with few deals expected for the remainder of the week, a source said.

"The calendar's light," the source said. "The supply is still very manageable."

A large offering via two competitive sales is in the works from the State of Washington.

Washington to sell four tranches

Washington intends to sell more than $1.49 billion of municipal bonds in four tranches in two sales set for January and February, according to a preliminary official statement.

The deal includes $346.08 million of series 2012D various purpose general obligation bonds, $699.08 million of series R-2012C various purpose G.O. refunding bonds, $188.6 million of series 2012E motor vehicle fuel tax G.O. bonds and $260.14 million of series R-2012D motor vehicle fuel tax G.O. refunding bonds.

The series 2012D bonds have serial maturities from 2013 though 2037, and the series 2012E bonds are due from 2013 through 2042.

The series R-2012C bonds have serial maturities from 2015 through 2029, and the series R-2012D bonds have serial maturities from 2013 through 2039.

The series R-2012C and series R-2012D bonds will price through a competitive sale on Jan. 31, according to the statement.

The series 2012D and series 2012E bonds will price through a competitive sale on Feb. 28.

Montague DeRose and Associates, LLC and Seattle-Northwest Securities Corp. are the financial advisers.

Proceeds will be used to refund outstanding G.O. bonds.

Utah County, Utah, to price

Utah County, Utah, also will bring a competitive sale. It plans to price $52 million of transportation sales tax revenue bonds, according to a preliminary official statement.

The series 2012 bonds (/AA-/) have serial maturities from 2012 through 2039.

The issue is insured by Assured Guaranty.

The bonds will price on Tuesday.

George K. Baum & Co. is the financial adviser.

Proceeds will be used to refinance a portion of the costs of transportation projects and related improvements.

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