Municipals close flat; New York City Transitional holds first retail order period for offering

By Sheri Kasprzak

New York, June 4 - Municipals were little changed to kick off the week, with little activity to move yields, said market insiders.

After ending last week on a sour note, a large slate of new deals threatens to add supply pressure to the already-volatile market, said one trader.

"I suspect it will be tough going with the new supply," he said.

About $10 billion of new offerings are expected to hit the market this week, said Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC.

On Friday, Kozlik said, AAA MMD yields in both 10 and 30 years fell by 4 basis points to 1.75% and 3.04%, respectively. On Monday, yields were little moved.

The week ahead will bring several large offerings. They will be led by a $1 billion sale of future tax secured bonds from the New York City Transitional Finance Authority.

NYC deal prices for retail

The first of a two-day retail order period was held on Monday for the New York City Transitional Finance Authority offering, market insiders reported, and so far, the reception has been mixed.

"It's only the first day, so it's hard to say, but so far, there's not much action from what I've seen," a market source said.

Shorter maturities have received the most attention, the insider said.

The bonds, which will be sold in three tranches, will price Wednesday for institutions through Goldman Sachs & Co.

The authority intends to use the proceeds for capital improvements to city facilities, school buildings and other city infrastructure. The deal includes $800 million of series 2012F-1 tax-exempt bonds, $100 million of series 2012F-2 taxable qualified school construction bonds and $100 million of series 2012F-3 taxable bonds.

Metro Washington Airports ahead

Leading Tuesday's primary activity, the Metropolitan Washington Airports Authority is set to come to market with $306.85 million of series 2012 airport system revenue refunding bonds (Aa3//AA-) through lead managers Barclays Capital Inc. and Loop Capital Markets LLC.

Proceeds will be used to refund the authority's series 2001A, 2002A and 2002D revenue bonds.

Ventura sells notes

In light primary activity on Monday, Ventura County, Calif., sold $136.87 million of series 2012-13 tax and revenue anticipation notes, said a pricing sheet.

The notes (MIG 1/SP-1+/) were sold competitively with J.P. Morgan Securities LLC winning the bid, said Paul Derse, the county's chief financial officer. The true interest cost came in at 0.201%.

The notes are due July 1, 2013, bear interest at 2.5% and priced at 102.31.

Proceeds will be used to finance general capital needs for the county during the 2012-13 fiscal year ahead of the collection of taxes and revenues.

For comparison's sake, JPMorgan also won the county's $137,855,000 sale of TRANs conducted last June. The TIC for that offering came in at 0.275476%.

The county, Derse told Prospect News, is not required to sell its debt competitively, but given its good credit, competitive sales make sense for the county.

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