Munis little changed in apathetic session; just $2.5 billion expected in holiday-shortened week

By Sheri Kasprzak

New York, Sept. 4 - Trading action remained very quiet as the market got back down to business after Labor Day, traders said. With few pricings and light trading, there was little to push the market.

"I'd call it flat. There's not a lot going on," a trader said.

Volume will be slight yet again, with just $2.5 billion of new issues expected this week, said Alan Schankel, managing director with Janney Montgomery Scott LLC.

The light volume from the past couple of weeks hasn't put a damper on overall volume for this year, said Schankel.

"Despite the impact of the final pre-holiday week, August new issue volume, at $32 billion, was 34% ahead of last year," Schankel wrote.

"Through the first eight months, new issuance is running 52% ahead of 2011, propelled by refinancing activity."

Chicago leads offerings

Topping the light list of new deals, the City of Chicago plans to come to market Thursday with $300 million of series 2012 senior-lien wastewater transmission revenue bonds (/A+/AA) through Ramirez & Co. Inc.

"Although debt service coverage on senior debt is in the range of six times, the second-lien coverage was 1.12 times in 2011, according to S&P," Schankel said of the city in a report released Tuesday.

The city intends to use the proceeds to finance capital improvements and extensions to the sewer system.

Dasny organizes deal

Another major offering for the week ahead comes from the Dormitory Authority of the State of New York. The authority plans to issue $238 million of series 2012A lease revenue bonds for the state university system, also through Ramirez.

The proceeds from those bonds will be used to finance the construction of dormitory facilities at various state universities and to refund existing debt.

The authority last came to market with university-related debt in July with $92.39 million of revenue bonds for St. John's University in two tranches. That deal included $48.46 million of series 2012A bonds with 2% to 5% coupons and 0.51% to 3.07% yields and $43.93 million of series 2012B bonds with 1% to 5% coupons and 0.47% to 3.1% yields.

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