Munis close little changed ahead of $7.3 billion of new issues; New Jersey Turnpike preps deal

By Sheri Kasprzak

New York, Aug. 20 - Municipals were mostly unmoved on Monday as the market waited for the week's new issues to set the tone, traders said.

Yields were unchanged with few new deals pricing and very little trading action.

"It's been a pretty quiet day," one trader said in the early afternoon.

Even so, about $7.3 billion of new deals are expected to price this week, outpacing last week's modest $6 billion calendar, said Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC.

Despite the higher volume this week, Janney managing director Alan Schankel pointed out that the summer doldrums effect is still in place.

"A primary beneficiary of slower markets has been municipal-to-Treasury ratios, which have slipped from their mid-summer highs in the 120% range, edging back towards 100%," Schankel wrote Monday.

"Demand has remained solid with the latest ICI data on mutual fund flows indicating $1.5 billion of new money in the week ending Aug. 8, marking not only the strongest week in three months but pushing the total of new municipal mutual fund investment above $35 billion in 2012 and $46 billion since investor sentiment reversed in May 2011."

New Jersey Turnpike deal ahead

Leading the new issues, the New Jersey Turnpike Authority is expected to come to market Thursday with $809.95 million of series 2012B turnpike revenue bonds (A3/A+/A) through Citigroup Global Markets Inc. and Goldman Sachs & Co.

The bonds are due 2019 to 2030.

Proceeds from the sale will be used to refund the authority's series 1991C-D, 2003A and 2009C-E revenue bonds.

The authority last came to market in June with $141.26 million of revenue bonds. Those bonds are due 2030 to 2035 with 3.625% to 5% coupons.

New York Thruway to price

Another transportation-related offering out of the Northeast comes from the New York State Thruway Authority, which is slated to sell $480,165,000 of series 2012A state personal income tax revenue bonds through J.P. Morgan Securities LLC and M.R. Beal & Co. LLC.

The bonds are due 2013 to 2032.

Proceeds will be used to make grants to reimburse local municipalities for highway, bridge and multimodal projects and to fund Metropolitan Transportation Authority projects.

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