Municipals little changed as East Coast eyes Hurricane Sandy; negotiated deals now day to day

By Sheri Kasprzak

New York, Oct. 29 - Municipals were lightly traded and the tone remained flat as the East Coast braced for Hurricane Sandy, market sources reported. The Securities Industry and Financial Markets Association recommended an early close for the bond market Monday. The New York Stock Exchange shut down as well.

The markets will remain closed Tuesday.

One trader noted only 25 block trades before 11 a.m. ET Monday.

"There's very little getting done today, and I really can't blame anyone," said the trader.

"People are putting their focus on this hurricane and getting to a safe place. It's going to be bad."

The storm, in fact, is being perceived as bad enough for some underwriters to place negotiated deals on a day-to-day basis, the trader said.

"Some issues will likely be pushed back," he said.

The week ahead could offer about $5.5 billion of new issues, a marked decline from the recent wave of new issues.

New Jersey preps offering

The largest offering of the week ahead comes from the State of New Jersey, which was slated to price $2.6 billion of series 2013C tax and revenue anticipation notes on Tuesday. It's yet to be determined if the notes will price given the weather conditions.

The notes are due June 27, 2013, and proceeds from the offering will be used to finance expenditures for the state's general fund ahead of the collection of taxes and revenues during the 2013 fiscal year.

More supply on tap

In another deal that will likely be postponed due to weather conditions, the Washington Suburban Sanitary District of Maryland is gearing up to price $250 million of series 2012 consolidated public improvement bonds, also competitively.

The bonds (Aaa/AAA/AAA) are due 2013 to 2032, and proceeds from the sale will be used to finance the construction or reconstruction of water supply facilities, water supply lines and transmission mains, sewage disposal facilities, sewer collection mains and trunk sewers and commission-built water and sewer pipes in subdivisions.

Connecticut G.O.s planned

Looking to offerings set to price later in the week, the State of Connecticut plans to price $400 million of series 2012 general obligation bonds in two tranches through Morgan Stanley & Co. LLC.

The offering includes $180 million of series 2012G.O. bonds and $220 million of series 2012B taxable G.O. bonds.

The 2012G bonds are due 2013 and 2022 to 2032. The 2012B bonds are due 2014 to 2022.

Proceeds from the sale will be used to finance capital expenditures for the state.

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