Munis flat to firmer as new issues hit market; Washington brings upsized $1.4 billion G.O.s

By Sheri Kasprzak

New York, Jan. 23 - Municipal yields were unchanged to a bit firmer on Wednesday as new deals started to price, market sources said.

"Secondary is on the backburner, and that's why yields are relatively unchanged," said a trader in the afternoon.

"Trading is very light. The new deals are getting the attention."

Demand is still very high, noted another market source, and new deals are being gobbled up accordingly.

"The supply-demand dynamic is improving," he said.

"Supply has been sluggish since the beginning of the year, for the most part, but it looks like things are picking up. Given the fact that we're still outperforming Treasuries, that's good news. Investors are interested."

Washington upsizes G.O.s

Leading the day's action, the State of Washington brought $1,393,665,000 of series 2013 general obligation bonds, said a pricing sheet. The deal was upsized from $1,231,300,000.

The deal included $230.58 million of series 2013D various purpose G.O. bonds, $666.68 million of series R-2013C various purpose G.O. refunding bonds, $159,405,000 of series R-2013D motor vehicle tax G.O. refunding bonds and $337 million of series 2013E motor vehicle tax G.O. bonds.

The series 2013D bonds are due 2014 to 2038 with 2% to 5% coupons.

The series R-2013C bonds are due 2013 to 2031 with coupons from 2% to 5%.

The series R-2013D bonds are due 2018 to 2031 with 3% to 5% coupons.

The 2013E bonds are due 2014 to 2039 with a term bond due in 2043. The serial coupons range from 2.8% to 5%. The 2043 bonds have a 4% coupon priced at 106.353.

The bonds were sold competitively.

State saves $79 million

The offering saved the state $79 million from the refunding portion. The reduction in principal and interest payments will give the state $11.9 million to balance budgets through the end of 2015, said a statement from the Washington Treasurer's Office.

"This is an $11.9 million reminder that our strong credit rating and reputation for prudent financial management are tangible assets for the taxpayer," said Treasurer James McIntire, in a statement.

"With the savings from this sale, we take a small step toward closing a substantial budget gap and another long stride in our efforts to make sure taxpayers get the maximum value for their money."

Proceeds will be used to fund various statewide capital projects, including transportation-related construction projects, as well as to refund existing debt for a present value savings, including the state's 1996 variable-rate demand G.O. bonds

Baltimore County prices notes

Elsewhere during the session, Baltimore County, Md., priced $200 million of series 2013 bond anticipation notes, said a pricing sheet.

The deal included $60 million of series 2013 metropolitan district notes and $140 million of series 2013 public improvement notes.

The metropolitan district notes are due Feb. 24, 2014, and have a 1.5% coupon priced at 101.405.

The public improvement notes are due Feb. 24, 2014, and have a 1.5% coupon priced at 101.405.

The notes were sold competitively with Bank of America Merrill Lynch winning the bid with a 0.16% true interest cost, said Robert Burros, the county's investment and debt manager.

Burros said there were seven bids for the notes. The county last issued notes in November of 2011 at a rate of 0.25%, Burros said.

Proceeds will be used to provide interim funding for the county's capital program.

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