Munis end another busy day unchanged; New York State Thruway brings $1.11 billion of bonds

By Sheri Kasprzak

New York, June 27 - Municipal yields were again unchanged as primary action dominated the market, said traders. Even so, secondary activity picked up.

"There does seem to be a bit more interest in secondary," said a trader reached in the afternoon.

"Overall, yields are fairly flat."

The session saw a couple of billion-dollar offerings come to market.

The New York State Thruway Authority brought $1,112,560,000 of series I general revenue bonds.

The bonds (A1/A/) were sold through senior managers Citigroup Global Markets Inc. and Siebert Brandford Shank & Co. LLC.

Yields adjusted downward

The bonds are due 2014 to 2032 with term bonds due in 2037 and 2042. The serial coupons range from 3% to 5%. The 2037 bonds have a split maturity with a 4.125% coupon priced at 98.858 and a 5% coupon priced at 108.228. The 2042 bonds also have a split maturity with a 4.125% coupon priced at 97.253 and a 5% coupon priced at 107.737.

Yields saw some downward adjustment in most maturities compared to the retail order period, said Alan Schankel, managing director with Janney Montgomery Scott LLC.

Proceeds will be used to provide funding for the authority's 2012-2015 multi-year capital program and to pay principal and interest on the authority's series 2011A general revenue bond anticipation notes.

MTA to bring $1 billion

A major offering out of the Empire State is expected to price on Thursday. The Metropolitan Transportation Authority is prepared to sell $1 billion of series 2012D transportation revenue refunding bonds through Bank of America Merrill Lynch, Barclays Capital Inc. and Loop Capital Markets LLC.

The offering will refund existing transportation revenue bonds.

Stockton to file for bankruptcy

After a long negotiation process, the City of Stockton, Calif., will file for bankruptcy, said Schankel.

"The city faces a $26 million budget gap for FY13, which it plans to close through defaulting on $10.2 million in bond payments and cutting about $11.22 million from employee and retiree costs, including elimination of retiree health benefits," Schankel wrote Wednesday.

The city had been in talks with its creditors for several months to avoid defaulting on its debt.

After the announcement on Wednesday, Standard & Poor's cut the city's issuer credit rating to D.

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