Municipals close little changed; Virginia's Commonwealth Transportation leads slate of deals

By Sheri Kasprzak

New York, May 29 - Municipals saw little action as the market got back down to business after the Memorial Day holiday, market insiders reported.

The new issue volume for this week will be markedly lighter, said sources reached during the day. New issuance is expected to reach about $5.6 billion, said Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC. Issuance for last week totaled about $11 billion, Kozlik said.

Meanwhile, the drop in issuance was actually a blessing for yields, traders reported.

"It's a breather, and we kind of needed it," one trader said.

"Last week's supply put a lot of pressure on yields, and it seems to be lifting now that the supply has dropped off. Demand is still good, so we expect the new deals to be absorbed well."

Commonwealth Transportation set

The largest offering in the week ahead will come from the Commonwealth Transportation Board of Virginia. The $600 million offering is expected to price competitively on Thursday.

The bonds (/AA+/AA+) are due 2013 to 2037 and will be used to finance transportation capital projects.

Massachusetts Water ahead

On Tuesday, the retail order period was held for the Massachusetts Water Abatement Trust's $352.58 million sale of series 2012 state revolving fund bonds (Aaa/AAA/AAA), said a market insider. Initial yields were seen between 0.35% and 4%.

The offering includes $89.96 million of series 16A bonds, $136.75 million of series 16B bonds, $29.83 million of series 2012A bonds and $96.04 million of series 2012B bonds. The 16A and 2012A bonds will be sold competitively, and the 16B and 2012B bonds will be sold on a negotiated basis.

The lead manager for the 16B and 2012B bonds is Jefferies & Co.

Proceeds will be used to finance or refinance water abatement and clean drinking water projects and to refund existing debt.

Triborough Bridge to price

The Triborough Bridge and Tunnel Authority of New York will come to market on Wednesday with $225 million of series 2012A general revenue bonds (Aa3/AA-/).

The bonds will be sold competitively and are due 2013 to 2042.

Proceeds will be used to refund the authority's series 2005B-4 revenue bonds.

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