Municipals little changed as new issues greeted warmly; Augusta, Ga., sells $134.9 million

By Sheri Kasprzak

New York, Oct. 16 - Municipal yields were mostly unchanged for the second session as new issues hit the market. Yields were in a holding pattern despite pressure from Treasuries, traders reported.

"Treasuries are putting a bit of pressure on munis, but it's not really making an impact," said one trader.

Maturities 10 years and out were perhaps a basis point cheaper during the afternoon, said a trader.

Metropolitan Transportation Authority of New York conducted a retail order period on its $950 million sale of series 2012A dedicated sales tax fund refunding bonds.

"The largest issuer of the week, $895 million [New York] MTA dedicated tax bonds, priced to a retail order period with the bifurcated 2037 maturity at a 4% coupon to yield 3.07% and the 5% coupon to yield 2.87%, both yields to the call," said Alan Schankel, managing director with Janney Montgomery Scott LLC.

MTA deal prepped

The MTA offering will be sold through Wells Fargo Securities LLC, Jefferies & Co. and Loop Capital Markets LLC. A second retail order period was conducted Tuesday, and the offering will open to institutional investors on Wednesday.

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

Augusta, Ga., prices bonds

In primary action, the Consolidated Government of Augusta, Ga., brought to market $134,855,000 of series 2012 water and sewerage revenue refunding and improvement bonds, according to a pricing sheet.

The bonds (A1) were sold competitively with Barclays winning the bid with a 3.343123% true interest cost, said Dianne McNabb with the PFM Group, the city's financial adviser.

The bonds are due 2018 and 2023 to 2032 with a term bond due in 2042. The serial coupons range from 3% to 5%. The 2042 bonds have a 3.5% coupon priced at 99.008.

"Augusta is not required to sell its bonds by competitive sale," said McNabb Tuesday.

"Augusta chose to sell these bonds by competitive sale in order to minimize its financing costs and maximize its savings from the refunding of its 2002 bonds. The refunding achieve present value savings of $17.9 million - 18.7% of refunded bonds - and total savings of $26.1 million."

Proceeds will be used 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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