Municipal yields flat amid light trading; $7.5 billion in new issues on tap in week ahead

By Sheri Kasprzak

New York, Oct. 15 - Municipals closed out Monday little changed with some firmness seen out long, said market insiders. Retail order periods, however, were seeing strong interest, traders said.

"Out long, we might be seeing some marginal firming, but overall it's really pretty flat," said one trader reached during the afternoon.

Looking to new-issue volume, about $7.5 billion in new deals are expected to come to market this week, said Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC. The amount is a little over a billion dollars higher than 2012's weekly average of $6.3 billion.

"The demand side, as gauged by Investment Company Institute fund flows data, jumped to $2.8 billion in the week ending Oct. 3, one of the biggest weekly inflows in recent years," said Kozlik.

"The moderately sized municipal calendar is being led by a $950 million New York Metropolitan Transportation Authority issue and a $225 million Pennsylvania Turnpike [Commission] offering."

MTA deal set

The Metropolitan Transportation Authority plans to come to market with $950 million of series 2012A dedicated tax fund refunding bonds through Wells Fargo Securities LLC, Jefferies & Co. and Loop Capital Markets LLC.

Proceeds from the offering will be used to refund the authority's series 2002A bonds and advance refund other debt.

New York environmental eyed

Looking to Tuesday's action, the New York State Environmental Facilities Corp. is scheduled to sell $144 million of series 2012 state revolving fund revenue bonds (Aaa//AAA) through Goldman Sachs & Co.

A retail order period was conducted for the offering on Monday.

The offering includes $110 million of series 2012E state revolving fund revenue bonds and $34 million of series 2012F taxable state revolving fund revenue bonds.

Proceeds from the offering will be used to finance clean and drinking water projects and refund portions of bonds that were issued under the 1991 master financing indenture.

August, Ga., preps sale

Heading up Tuesday's competitive schedule, the Consolidated Government of Augusta, Ga., is ready to price $135.29 million of series 2012 water and sewerage revenue refunding and improvement bonds (A1).

The government plans to use the proceeds from the sale to finance water and sewerage capital projects and refund a portion of the system's series 2002 bonds for a net present value savings equal to 16.8% of refunded principal with no extension of maturity.

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