Minnesota prices; Puerto Rico Electric set to bring $600 million of revenue bonds; munis flat

By Cristal Cody

Tupelo, Miss., Aug. 6 - Municipal bonds stayed mostly unchanged on Tuesday going out about 1 basis point to 3 bps down across the curve as the market waited for large deals from the Puerto Rico Electric Power Authority and the South Carolina Public Service Authority, according to informed sources.

On Tuesday, Minnesota sold about $470 million of general obligation bonds via a competitive sale. Pricing information was not available by press time.

"It's kind of quiet," a trader said. "Everybody's sitting on the sidelines, and a lot of people are just on vacation. This week, we're just waiting until this Puerto Rico deal comes out. Other than a couple of things, it's just kind of flat."

About $6 billion to $7 billion of new municipal issuance is expected over the week, with the bulk concentrated in a few deals, sources said.

Puerto Rico authority to price

Puerto Rico Electric Power Authority is scheduled to bring $600 million of series 2013A power revenue bonds, according to a preliminary official statement.

The sale is expected on Wednesday, according to an informed source.

"Saw a scale today with a 7% coupon on the 43s," the informed source said. "It's coming at a slight discount. The structure looks good."

Morgan Stanley & Co. LLC and Wells Fargo Securities LLC are the senior managers.

Proceeds will be used to finance various projects under the authority's capital improvement program.

South Carolina authority too

The South Carolina Public Service Authority is prepping a $1.75 billion offering of revenue obligation bonds (Aa3/AA-/AA-) later in the week, according to a market source.

The negotiated sale includes $811 million of series 2013A tax-exempt bonds, $399 million of series 2013B tax-exempt refunding bonds, $212 million of series 2013C taxable bonds and $326 million of series 2013D taxable Libor index bonds, according to a preliminary official statement.

Goldman Sachs & Co. is the bookrunner for the series A and B bonds. Barclays is the bookrunner for the series C bonds, and Morgan Stanley is the bookrunner for the series D bonds.

Proceeds will be used to fund a portion of the authority's ongoing capital improvement program and to refinance a portion of outstanding debt.

Philadelphia plans sales

The City of Philadelphia has a $200 million offering of water and wastewater revenue bonds coming up in the deal pipeline.

The series 2013A bonds (A1/A/A+) have serial maturities from 2017 through 2023 and a term bond due 2043, according to a preliminary official statement.

Morgan Stanley and Siebert Brandford Shank & Co. LLC are the senior managers.

Proceeds will be used to finance capital improvements to the city's water and wastewater systems.

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