Munis close slightly firmer as supply pressure eases; week's volume expected to be $4.5 billion

By Sheri Kasprzak

New York, March 26 - Municipals were slightly better on Monday, coasting on the momentum of Friday's action, said market insiders. Yields improved by 1 basis point to 3 bps across the curve, said one trader reached during the afternoon.

Treasuries were weaker, but municipals shook off those losses.

"We're coasting along on Friday's gains, but there's a significant drop in supply, so it's almost like all that pressure has lifted, and there's an overall firmer feeling to the market," one trader said.

In fact, about $4.5 billion of new issues are expected, said Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC.

"Municipal primary market volume is expected to be about $4.5 billion this week, a little higher than it looked like at the end of last week but less than the market has seen over the last few weekly sessions," Kozlik said.

Wellesley deal ahead

Most of the offerings coming up this week are smaller than deals seen in the market recently. One of the bigger deals worth watching, Kozlik noted, is a $150 million offering of series 2012 revenue bonds from the State of Massachusetts for Wellesley College.

The deal will be sold in two tranches: $55 million of series 2012J bonds and $95 million of series 2012K taxable bonds. Pricing is expected for Wednesday through J.P. Morgan Securities LLC.

Another big offering for the week comes from King County, Wash., which plans to price $256.23 million of series 2012 sewer revenue and refunding bonds (Aa2/AA+/).

The deal includes $132.55 million of series 2012 sewer revenue and refunding bonds and $123.68 million of series 2012 limited tax sewer general obligation refunding bonds.

JPMorgan is also the senior manager for that deal.

Mayo Clinic bonds planned

Coming up on Wednesday, the City of Rochester, Minn., is set to price $200 million of series 2012 health-care facilities revenue bonds (Aa2/AA/).

The bonds will be sold through Wells Fargo Securities LLC and Bank of America Merrill Lynch and are due Nov. 15, 2041.

Proceeds will be used to finance the construction, acquisition and equipment of a proton beam radiation therapy center at the Mayo Clinic-Methodist Hospital and to renovate and construct other properties operated by the clinic.

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