Municipals mostly unchanged; Wisconsin brings $259.68 million of transportation revenue bonds

By Sheri Kasprzak

New York, Feb. 6 - Muni yields were again mostly flat as secondary action was rather uninspired, said traders reached during the session.

"There's very little going on in secondary, especially given how much is being freed to trade," one trader said.

"It's frankly kind of pathetic out there today."

Most of the attention was on the primary market, where the bulk of the week's negotiated deals were pricing, including an offering from the Kentucky Asset/Liability Commission.

Treasury yields continue to rise, however, and with tax-free yields barely moving, municipal-to-Treasury ratios were little changed from last week, said Alan Schankel, managing director with Janney Montgomery Scott LLC.

"The new-issue slate was moderate in size and demand was solid, with several negotiated deals repriced to lower yields."

Wisconsin brings bonds

Among those bonds that repriced to lower yields was the State of Wisconsin's $259.68 million sale of series 2013-1 transportation revenue bonds (Aa2/AA+/AA+).

The yields were "lowered 7 bps in shorter maturities and 3 bps in 10 years compared to initial pricing levels," Schankel said Wednesday.

The bonds are due 2016 and 2018 to 2033 with 4% to 5% coupons.

Goldman Sachs & Co. and Ramirez & Co. Inc. were the senior managers.

Proceeds will finance state transportation and highway projects.

Kentucky Asset deal prices

In other primary action, the Kentucky Asset/Liability Commission sold $153.29 million of series 2013 taxable general fund first series funding notes, said a pricing sheet.

The bonds (Aa3/A+/A+) were sold through Morgan Stanley & Co. LLC.

The bonds are due 2014 to 2023 with 0.654% to 2.998% coupons, all priced at par.

Proceeds will be used to fund an obligation to the Teachers' Retirement System of Kentucky.

Moody's lifts San Francisco

Moving to ratings news, Moody's Investors Service lifted San Francisco's rating to Aa1 from Aa2.

"The rating agency cited a large tax base, wealthy populace, recovering housing market and strong fiscal position," Schankel said.

"Unlike some other areas of the state, San Francisco was minimally impacted by falling real estate values during the recession."

Moody's also upgraded Ventura County to Aa1 from Aa2.

"In addition to a stable property tax base, the county was cited as having an exceptional record of sound financial management through the economic downturn," Schankel said.

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