Munis drift lower in quiet trading; Utility Debt Securitization Authority plans $2.09 billion

By Cristal Cody

Tupelo, Miss., Nov. 26 - Municipal bond yields ended about 1 basis point to 2 bps lower on the long end of the curve on Tuesday on light primary activity, according to market sources.

"It's very, very quiet," one source said. "It's feeling a little better, but people mostly got one leg out the door."

The bond markets will be closed on Thursday for the Thanksgiving Day holiday and will close early on Friday.

"There's a pretty good supply in the secondary market," a trader said. "A lot of new blocks came in today, and a lot of them are trading, so there seems to be interest. Mostly people don't want to be long too much going into the holiday."

In the day's pricing action, the County of Westchester, N.Y., sold $56.96 of general obligation bonds (Aa1/AAA/AAA), which included a $52.65 million tranche of series 2013B bonds priced with a 2.58% true interest cost and a $4.31 million offering of series 2013C bonds with a 2.1% TIC, according to an informed source. J.P. Morgan Securities Inc. was the winning bidder in both competitive sales.

The State of South Carolina planned to price $146.4 million of series 2013A general obligation bonds on Tuesday. Additional information was not available by press time.

Utility Debt in pipeline

Coming up in the deal pipeline, the State of New York Utility Debt Securitization Authority plans to sell $2,085,000,000 of restructuring bonds, according to a preliminary official statement.

The deal includes $485 million of series 2013T federally taxable restructuring bonds and $1.6 billion of series 2013TE federally tax-exempt restructuring bonds.

Goldman Sachs & Co. and Morgan Stanley & Co. LLC are the joint senior managers.

Proceeds will be used by the authority to retire outstanding debt.

The transaction is expected to close on Dec. 17.

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