Municipal bonds trade better; yields fall 3 bps to 5 bps on long end; calendar stays light

By Cristal Cody

Prospect News, Jan. 27 - Municipals stayed stronger in light activity on Friday, and yields fell 3 basis points to 5 bps on the longer end of the curve.

"It's just really quiet, not a lot to hang your hat on," a bond source said. "There's not a lot of activity, and the calendar next week is pretty light."

The main deal for the upcoming week is from the State of Washington, which plans to sell more than $1.49 billion in four tranches of municipal bonds on Jan. 31 and Feb. 28.

The offering next week includes $699.08 million of series R-2012C various-purpose general obligation refunding bonds and $260.14 million of series R-2012D motor vehicle fuel tax G.O. refunding bonds.

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

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

"Eyes will be focused on that. It's a pretty high rated state," a source said.

Details for a handful of upcoming offerings of more than $100 million each also emerged on Friday.

The Department of Veterans Affairs of the State of California plans to raise $150.38 million of series 2012A home purchase revenue bonds, according to a preliminary official statement.

The bonds (Aa3/AA/AA-) have serial maturities from 2018 through 2028.

JPMorgan is the bookrunner. Co-managers are Academy Securities, Inc., Barclays Capital Inc., Drexel Hamilton, LLC, Fidelity Capital Markets Inc., Morgan Stanley & Co. LLC, Raymond James & Associates, Inc., Roberts & Ryan Investments Inc., SL Hare Capital, Southwest Securities, Inc. and Stone & Youngberg.

Proceeds will be used to refund outstanding revenue bonds.

Georgia Tech deal

Down South, the Development Authority of Fulton County intends to sell $124.54 million of revenue bonds (A2//A+) in two tranches for Georgia Tech Athletic Association, according to a preliminary official statement.

The offering includes $97.925 million of series 2012A bonds and $26.615 million of series 2012B bonds.

The series 2012A bonds have serial maturities in 2019, 2022 and 2027 through 2032 and term bonds due in 2036 and 2042.

The series 2012B bonds have serial maturities from Oct. 1, 2012 through Oct. 1, 2027 and term bonds due 2031 and 2037.

Bank of America Merrill Lynch is the bookrunner.

Proceeds will be used to refund outstanding series 2001 revenue bonds, to finance or refinance improvements on the campus of the Georgia Institute of Technology and to pay a termination payment related to a swap.

Transportation Board to sell

Also ahead, the Commonwealth Transportation Board in Virginia expects to price $121.35 million in two tranches of revenue refunding bonds, according to a preliminary official statement.

The offering includes $84.605 million of series 2012A bonds for the Northern Virginia Transportation District Program and $36.745 million of series 2012B bonds for the U.S. Route 58 Corridor Development Program.

The series 2012A bonds have serial maturities from 2013 through 2027.

The series 2012B bonds are due from 2013 through 2018.

The bonds will price through a competitive sale on Wednesday.

Public Resources Advisory Group is the financial adviser.

Proceeds will be used to refund a portion of the outstanding series 2001A revenue bonds, series 2002A revenue and refunding bonds, series 2001B revenue bonds and series 2002B revenue and refunding bonds.

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