Municipal yields flat to firmer as issuance picks up after Sandy; MTA preps two offerings

By Sheri Kasprzak

New York, Nov. 5 - Municipal yields were unchanged to somewhat firmer on Monday after Hurricane Sandy led issuers to postpone offerings, market sources said. About $6.5 billion in new offerings will hit the market this week, including two significant deals from the Metropolitan Transportation Authority of New York.

"We expect municipal market volume to be about $6.5 billion this week as the buyside, sellside and issuers search for normalcy after last week's disaster," said Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC.

"The 2012 elections are now upon us, and hold several potential effects as a result of their results. Our November Municipal Monthly has more on this topic, but several local governments are holding votes during tomorrow's elections as referendums on government borrowing. Voters in states such as California are going to be asked to approve about $35 billion of bond issues throughout the country..."

MTA preps two deals

Leading the week's primary action, the Metropolitan Transportation Authority is set to come to market with two deals, including a variable-rate offering.

The authority will price $259.45 million of series 2012G-2 variable-rate transportation revenue refunding bonds in four tranches through J.P. Morgan Securities LLC.

Proceeds will be used to refund existing debt.

The authority is also prepared to bring $350 million of series 2012H fixed-rate transportation revenue bonds through Siebert Brandford Shank & Co. LLC, Duncan-Williams Inc. and Rice Financial Products Co.

Proceeds will be used to finance transit and commuter projects.

Utah Transit bonds to price

Also ahead this week, the Utah Transit Authority will price $296,825,000 of series 2012 subordinate sales tax revenue and refunding bonds, which were initially slated to price last week.

The bonds (A1/A-/A+) will be sold through Morgan Stanley & Co. LLC and Bank of America Merrill Lynch.

The bonds are due 2013 to 2017 and 2021 to 2032 with term bonds due in 2037 and 2042.

The authority plans to use the proceeds to refund its series 2011A-B revenue bonds.

In another transit deal held over from last week, the Dallas Area Rapid Transit of Texas is set to price $128,315,000 of series 2012 senior-lien sales tax revenue bonds (Aa2/AA+/) through Loop Capital Markets LLC.

Proceeds from the deal will be used to refund commercial paper notes.

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